Canfor Corporation’s subsidiary, Vida AB, has announced the acquisition of AB Karl Hedin Sågverk for SEK 1.15 billion (approximately USD 164 million) in a strategic move to bolster its presence in Sweden’s timber industry. This acquisition includes SEK 39 million in working capital and encompasses three sawmills located in Central Sweden. With this addition, Vida AB’s annual production capacity increases by approximately 230 million board feet, bringing the total to around 2.1 billion board feet.

Strengthening market position in Central Sweden

The acquisition of AB Karl Hedin Sågverk enhances Vida AB‘s operational footprint in Central Sweden, a region known for its high-quality timber resources. This strategic expansion allows Vida AB to diversify its operations and strengthen its position in the Swedish sawmill market. The integration of these sawmills is expected to yield annual synergies of approximately $15 million within three years, primarily through optimized log procurement, streamlined operational practices, and aligned marketing programs.

Financing and future outlook

Canfor Corporation plans to finance the acquisition primarily through cash on hand and new equity from minority Vida AB shareholders. The transaction is anticipated to close in the coming months, subject to customary closing conditions and regulatory approvals. This acquisition aligns with Canfor’s strategy to expand its global footprint and enhance its product offerings in the wood processing industry.

About Canfor Corporation

Canfor Corporation is a global leader in the manufacturing of high-value, low-carbon forest products, including dimension and specialty lumber, engineered wood products, pulp and paper, wood pellets, and renewable energy. Headquartered in Vancouver, British Columbia, Canfor operates more than 50 facilities across Canada, the United States, and Europe. The company owns a 77% stake in Vida AB, Sweden’s largest privately owned sawmill company. Vida AB operates 12 sawmills strategically located in or near the vast forest areas of Småland and Västra Götaland provinces. Approximately 85% of its production is exported to Europe, the USA, and Asia, encompassing products such as construction wood, animal bedding, fuel pellets, and packaging materials.

About Vida AB

Vida is a worldwide supplier of premium products that come from sustainably managed Swedish forests. The firm employs over 1,600 workers across 24 industrial facilities, including 12 sawmills. In Småland, Skåne, and Västra Götaland, the industries are ideally situated in proximity to the forest owners. The main focus of manufacturing is structural timber for a variety of markets. Eighty-eight percent of Vida’s sawn wood exports go to the United States, Australia, Africa, Asia, and Europe. In addition to packaging, the company makes housing, bedding, pellets, and trades biofuels.

The acquisition of AB Karl Hedin Sågverk marks a significant milestone in Vida AB’s growth trajectory, enhancing its production capacity and market reach in Sweden’s sawmill industry. By leveraging high-quality timber resources and streamlining operations, Vida AB is well-positioned to meet the growing demand for sustainable wood products in both domestic and international markets.

Source:  canfor.com