Tembec to sell its British Columbia wood products assets to Canfor Corporation

Nov 28, 2011. /Lesprom Network/. Tembec has reached an agreement to sell its British Columbia Southern Interior wood products assets to Canfor Corporation for a purchase price of $60 million, which includes working capital, as the company said in a press release received by Lesprom Network. Canfor has agreed to purchase Tembec’s Elko and Canal Flats sawmills and the associated Crown tenures which consist of approximately 1.1 million cubic meters of combined Crown, private land and contract annual allowable cut. Closing of the contemplated transaction is expected to occur late in the first calendar quarter 2012 and is subject to regulatory approvals and customary closing conditions. The transaction will include a long-term agreement to provide residual fiber supply for Tembec’s NBSK pulp mill located in Skookumchuck, British Columbia. Tembec management has met with employees to inform them of the Company’s proposed transaction. “This transaction is an important step in the ongoing reshaping of our business portfolio and geographical footprint to maximize shareholder value, while remaining committed to the lumber business,” stated Tembec President and CEO James Lopez. “We continue to seek opportunities to participate in the consolidation that is changing the forest products industry for the better, creating stronger and more focused companies." “We are very pleased to be selling this part of our business to Canfor, a company with such a long-standing reputation in the industry. Under the leadership of President and CEO Don Kayne, Canfor is well known for its significant capital investment programs and we feel that Elko and Canal Flats sawmills will greatly benefit from joining this well-managed Company,” underlined Mr. Lopez. Approximately 455 employees are included in the transaction. The Elko and Canal Flats sawmills employ some 165 people on each site. The remaining employees include 33 forest management workers and roughly 90 staff located in Cranbrook head office and associated Tembec field sites. Tembec also operates two other plants in British Columbia: a NBSK pulp mill in Skookumchuck, which employs 280 people and a high-yield pulp mill in Chetwynd, which employs 140 people. These operations will not be affected by the contemplated transaction.