(Chibougamau) The family forestry company Chantiers Chibougamau has reached an agreement with GreenFirst Forest Products to acquire its activities in Quebec for 90 million, the two companies announced on Wednesday.
The company that manufactures and markets forest products in Nord-du-Québec plans to operate the La Sarre and Béarn sawmills and their operations, which belonged to GreenFirst since last year.
The two factories in Abitibi-Témiscamingue had previously been owned by Tembec and then by RYAM-Rayonier. They employ around 320 people, who will join a team of around 1,500 employees.
Chantiers Chibougamau is one of the main employers in Chibougamau and Lebel-sur-Quévillon. The company, which has been in operation since 1961, processes 2.7 million cubic meters of wood per year. It also produces 300,000 tonnes of bleached kraft pulp.
Chantiers Chibougamau emphasizes that this transaction will allow it to consolidate its existing activities and better deal with fluctuations in the wood industry.
The family business will thus be able to count on more quality lumber boards and greater stability of its long-term chip supply.
“We are not looking to add up for growth alone, but to make each link in the chain that we make up more solid. We are also proceeding with this transaction because we firmly believe in the relevance and future of tree cutting and processing in Quebec in the long term, to meet the needs of the fight against climate change through our products,” specifies the executive director, corporate development, Frédéric Verreault, in a press release.
For its part, GreenFirst Forest Products says the sale of its two sawmills in Quebec is a strategic transaction aimed at unlocking significant value for shareholders.
GreenFirst says it plans to use the net proceeds from the sale to strengthen its balance sheet and continue to invest in its Ontario operations. The transaction amounts to approximately $90 million in cash payable at closing, including approximately $40 million for specific working capital items.
“We are committed to ensuring a smooth transition with the family business Chantiers Chibougamau. This transaction is a win-win situation for both Chantiers Chibougamau and GreenFirst, as it reinforces the alignment of each company’s primary objective and growth strategies,” said GreenFirst Chairman Paul Rivett in a press release.
The transaction is subject to approval by Canada’s Competition Bureau and is expected to close in the first quarter of 2023.
Company in this dispatch: (TSX: GFP)