Canfor will buy PinkWood Ltd.'s I-joist business in Calgary, Alberta, acquiring the facility that produces engineered wood joists for residential, multi-family and commercial construction; the facility has 120 employees and production capacity of 46 million linear feet, and PinkWood will retain its name and operate as a wholly owned subsidiary, according to Canfor Corporation.
The total purchase price is $68 million including working capital, with $55 million payable on closing and $13 million payable over five years. The purchase price represents a 5 times EBITDA multiple based on current production levels and earnings, including identified synergies.
The company anticipates financing the transaction with cash and available liquidity on hand. The transaction is expected to close in the third quarter, subject to customary closing conditions.
Founded in 2009, PinkWood is the largest I-joist facility in Western Canada. Canfor operates more than 50 facilities across Canada, the United States and Europe and holds a 77% stake in Vida AB.