VANCOUVER — West Fraser Timber Co. Ltd. is expanding its U.S. operations after reaching an agreement to purchase a lumber mill in Lufkin, Texas, for about US$300 million.
The purchase from Angelina Forest Products will be funded with cash on hand and is expected to close after receiving U.S. regulatory approvals.
The Vancouver-based company will provide further details about the transaction during its third-quarter earnings call on Oct. 28.
Annual synergies are expected to reach about US$13 million within two years.
The facility, which produces southern yellow pine lumber products, has been in operation for about two years and is expected to reach full capacity of about 305 million board feet in the next three to four years.
The sawmill will be one of West Fraser’s lowest-cost operations and contribute to increasing its overall lumber capacity to about seven billion board feet, with southern yellow pine representing about half of that output.
“We believe this modern, high-margin facility will enhance our existing U.S. platform of lumber mills and help us to better meet the growing demand for our lumber products in Texas and the U.S. South,” stated West Fraser CEO Ray Ferris.
This report by The Canadian Press was first published Oct. 12, 2021.
Companies in this story: (TSX:WFG)
The Canadian Press