VANCOUVER - International Forest Products Ltd. (TSX:IFP.A) has signed a deal to buy the assets of Rayonier Inc.'s wood products business including three sawmills in Georgia for $80 million, its first such deal in the U.S. southeast.
The Vancouver-based company said the mills in Baxley, Swainsboro and Eatonton have a combined annual capacity of 360 million board feet of southern pine dimension lumber.
"We have been looking for an opportunity in the Southeast for some time and consider this is an ideal time to proceed," Interfor president and chief executive Duncan Davies said in a statement.
"We believe the operations and people involved will fit seamlessly into Interfor's operating system and will make a significant contribution to our future success."
Under the deal, Interfor has also agreed to hire all of the group's 260 employees.
Rayonier owns, leases or manages more than one million hectares of timber and land in the United States and New Zealand as well as a business which produces specialty cellulose fibres.
"Rayonier has enjoyed a long association with Interfor, supplying their lumber business in the Pacific Northwest for many years, and we look forward to expanding that relationship into the southeast," Paul Boynton, chairman, president and CEO of Rayonier.
The agreement will increase Interfor's total annual capacity to more than two billion board feet.
Interfor said the transaction will be financed from its existing credit lines.
The deal comes as the U.S. housing market is starting to show signs of recovery. Housing starts in the U.S. are expected to rise this year after a recovery in 2012 that saw builders post their best year since 2008.
Interfor already has sawmills in British Columbia, Washington and Oregon with 1,300 employees.