GreenFirst Forest Products has finalized its purchase of four lumber mills and one paper mill in northeastern Ontario from Rayonier.
In a news release, the Vancouver lumber player announced that the US$235-million cash-and-share deal closed on Aug, 28. The acquisition was first announced last April.
The purchased sawmills are in Chapleau, Cochrane, Hearst and Kapuskasing in Ontario, with the newsprint mill in Kapuskasing also included. Also in the mix are lumber mills in Béarn and La Sarre in Québec.
GreenFirst said they have assembled assets worthy of being a top 10 producer of lumber with a combined annual production capacity of 755 million board feet capable of producing spruce-pine-fir lumber, wood chips and other by-products for the residential and commercial sector. On the newsprint side, there's annual capacity of 205,000 million tonnes.
Picking up these mills gives them access to 3.29 million square metres of wood supply in two provinces and includes a 20-year chip supply agreement with Rayonier.
In the release, the company gave the indication it intends to invest in these operations to maximize what they have.
GreenFirst Chair Paul Rivett said closing the transaction is the "culmination of a year of hard work and tremendous effort by all those involved." He said the company is cashed up to become a "premier" North American lumber producer.
"We are excited to announce the closing of this transaction and to begin working to invest in and optimize the lumber mills," said GreenFirst CEO Rick Doman in a statement.
"Our experienced management team has developed a plan which we believe will allow us to significantly reduce cash operating costs and potentially increase lumber capacity. We also intend to make improvements to the mills' management structure, sales processes and supply chains which we expect will generate meaningful operational improvements."
Doman added emphasized the company places a priority on environmental stewardship through sustainable forest management practices.