Interfor Acquires Chaleur Forest Products

Interfor Corporation has agreed to buy 100 per cent of Kilmer Group affiliate Chaleur Forest Products for $325 million in cash and debt. The second-largest producer of lumber in Atlantic Canada, Chaleur Forest Products’ sawmill operations are located in Belledune and Bathurst, New Brunswick, with an annual lumber production capacity of 350 million board feet.

“This acquisition is consistent with Interfor’s growth-focused strategy as a pure-play lumber producer and builds upon our recent expansion into Eastern Canada with further geographic diversity,” says Ian Fillinger, President & Chief Executive Officer for Interfor. “New Brunswick has a secure, high quality and competitive log supply, a supportive investment environment and proximity to key eastern markets.

Chaleur, a pioneer in New Brunswick’s forestry industry since it began operations in the early 1990s, was under Kilmer Forestry’s management since March 2016. Since then, Chaleur invested more than $40 million in capital projects, allowing it to make meaningful improvements to its operations, including mill automation, just-in-time equipment reporting, asset improvements and projects to improve environmental sustainability.

“I am very proud of the accomplishments Chaleur and Kilmer have achieved together,” says Larry Tanenbaum, Chairman and CEO of Kilmer Group. “And the transaction with Interfor is a strong opportunity for Interfor to leverage New Brunswick’s competitive market and generate long-term benefits for shareholders, customers, and employees alike.”

Kilmer Group is a Canadian company with substantial private equity, infrastructure and real estate holdings – among others. Kilmer Forestry, one of its branches, is committed to sustainable forestry practices and meeting the needs of its customers and stakeholders through responsible management of public and private forests under its stewardship. Under Kilmer Forestry’s ownership, Chaleur promoted forest health, recognized multiple uses of the forest, complied with all environmental requirements, and continually improved practices to minimize the environmental footprint.

Says Duane Woods, a Chaleur founding partner and President of Chaleur during Kilmer Forestry’s ownership, “Chaleur is a high-quality business that will represent an exciting and complementary addition to Interfor. We are proud of our accomplishments to date which have been achieved through Kilmer’s commitment to the business, its leadership and vision, and through the hard work and dedication of our superb workforce. We are pleased to complete this transaction with Interfor and are confident in Chaleur’s future success.”

Kilmer Group will continue its local operations and pursue investment opportunities in New Brunswick.