VANCOUVER—Lumber producer Canfor Corp. has signed a letter of intent with Groupe Lebel Inc. to sell its Daaquam sawmill in Saint-Just-de-Bretenières, Quebec.
The transaction is expected to close at the end of March, 2014 and is subject to closing conditions, including a formal agreement.
The Daaquam mill—its last in eastern Canada—produced 120 million-board-feet of lumber in 2013. Canfor still operates a distribution centre in Toronto and a sales office in Quebec City.
“Daaquam was sold because it was not core to our Western Canadian operations. Groupe Lebel is a well respected company and Daaquam is a good strategic fit for it,” said Don Kayne, CEO of Canfor.
The proceeds of sale of the Daaquam sawmill, and working capital combined with the sale to another buyer of other associated properties related to Daaquam, are expected to net Canfor approximately $25 million.
Canfor recently posted fourth-quarter revenues of about $809.5 million and 2013 total sales of almost $3.2 billion.
The lumber company’s pulp division Canfor Pulp also announced a share buy-back program aimed at cancelling five per cent of its outstanding shares. At current share prices the price tag for that move could pass $31.5 million.