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Total consideration of US$12 million, including inventory
Grows Western’s specialty products offering, adding glulam manufacturing capacity
Immediately accretive transaction with opportunities for further growth
Creation of Engineered Wood subsidiary focused on North America Mass Timber growth
VANCOUVER, British Columbia, July 19, 2022 (GLOBE NEWSWIRE) -- Western Forest Products Inc. (TSX: WEF) (“Western” or the “Company”) today announced that a wholly owned subsidiary of Western has entered into an agreement to acquire certain assets of Calvert Company, Inc. (collectively “Calvert”) located in Washington State for consideration of US$12.0 million, including inventory of US$2.5 million, subject to a customary post-closing inventory adjustment.
Calvert is one of the oldest glulam manufactures in the U.S. and has more than 60 years of experience producing high quality glulam beams in multiple species, including Douglas fir, southern yellow pine and yellow cedar, for industrial, commercial and residential projects around the world. Calvert has manufacturing facilities in Washougal, Washington and Vancouver, Washington with a combined annual glulam capacity of approximately 35 million board feet on a two shift basis. Calvert’s operations employ approximately 60 employees and produced approximately 13 million board feet of glulam in 2021 on a single shift basis.
“We are excited to welcome Calvert’s employees to Western. This acquisition will help position Western to capitalize on the growing North American Mass Timber building market and is consistent with our strategy of moving up the product value chain and growing our portfolio of value added products,” said Don Demens, Western’s President and CEO. “We look forward to working with Calvert’s owner, Doug Calvert, who will be remaining with Western following the closing of the transaction in a consulting capacity. Doug’s strong relationships and expertise in glulam will be invaluable as we look to further grow the business.”
Mass Timber construction, which utilizes products such as glulam and cross laminated timber, represents a significant growth opportunity in North America. There are currently over 1,300 Mass Timber projects constructed, in progress or in the design phase in North America and third party research estimates 4.4 billion board feet of lumber demand from Mass Timber construction by 2035. In addition, Mass Timber is a natural, renewable, and sustainable building material, with a lighter carbon footprint than other construction materials.
The transaction will be financed with cash on hand, and is expected to close in the third quarter of 2022. Completion of the transaction is subject to satisfaction of customary closing conditions. As part of the transaction, Western has created a new engineered wood subsidiary which will remain focused on further growth opportunities throughout the entire Mass Timber value chain.
About Western Forest Products Inc.
Western is an integrated forest products company building a margin-focused log and lumber business to compete successfully in global softwood markets. With operations and employees located primarily on the coast of British Columbia and Washington State, Western is a premier supplier of high-value, specialty forest products to worldwide markets. Western has a lumber capacity in excess of 1.0 billion board feet from seven sawmills and four remanufacturing facilities. The Company sources timber from its private lands, long-term licenses, First Nations arrangements, and market purchases. Western supplements its production through a wholesale program providing customers with a comprehensive range of specialty products.
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Executive Vice President & Chief Financial Officer
Senior Director, Communications
This press release contains statements that may constitute forward-looking statements under the applicable securities laws. Readers are cautioned against placing undue reliance on forward-looking statements. All statements herein, other than statements of historical fact, may be forward-looking statements and can be identified by the use of words such as “will”, “expected”, “estimate” and similar references to future periods. Forward-looking statements in this news release include, but are not limited to statements relating to: the anticipated benefits from the acquisition, final inventory, the timing of the transaction closing, production capacity, future operating performance and the North American mass timber market demand and growth. Although such statements reflect management’s current reasonable beliefs, expectations and assumptions, there can be no assurance that forward-looking statements are accurate, and actual results or performance may materially vary. Many factors could cause our actual results or performance to be materially different, including a change in the Company’s financial situation, U.S. and international economic conditions, and other factors referenced under the “Risks and Uncertainties” section of our MD&A in our 2021 Annual Report dated February 16, 2022.