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Canfor Corp., Vancouver, B.C., has entered into an agreement with PinkWood Ltd. to purchase its I-joist business for $68.0 million, including working capital. Founded in 2009, PinkWood is the largest I-joist facility in Western Canada, producing engineered wood joists for residential, multi-family, and commercial construction.
Located in Calgary, Alberta, PinkWood has 120 employees, with production capacity of 46 million linear feet.
The purchase price represents a five times EBITDA multiple based on current production levels and earnings, including identified synergies. Following recent capital investment there is significant opportunity for growth and EBITDA expansion. Of the total consideration, $55.0 million is payable on closing, with the remaining $13.0 million payable over five years.
“PinkWood is a leading manufacturer of high-quality I-joists with a strong management team and stable returns,” said Susan Yurkovich, president and CEO of Canfor. “Canfor’s acquisition of PinkWood complements our operations in Western Canada by enhancing product diversification and supporting the continued expansion of our value-added manufacturing capabilities. We are pleased to welcome the PinkWood team and believe this acquisition will strengthen our existing asset base and create opportunities for growth and value creation.”
PinkWood will retain its name and operate as a wholly owned subsidiary of Canfor. Canfor anticipates financing this transaction with cash and available liquidity on hand. The transaction is expected to close in the third quarter, subject to customary closing conditions.
Canfor 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 green energy. Headquartered in Vancouver, B.C., Canfor produces renewable products from sustainably managed forests, at more than 50 facilities across its diversified operating platform in Canada, the United States and Europe. The company also has a 77% stake in Vida AB, Sweden’s largest privately owned sawmill company.
