VANCOUVER, BC (News release) -- Canfor Corporation announced that its 77%-owned subsidiary, Vida AB, has entered into an agreement to purchase AB Karl Hedin Sågverk from Mattsbo Såg AB and certain minority shareholders for a purchase price of $164 million (1.15 billion Swedish Krona), including working capital of approximately $39 million.

AB Karl Hedin Sågverk operates three sawmills located in Central Sweden and will add approximately 230 million board feet to Vida's annual production capacity. Following completion of this acquisition, Vida will have annual production capacity of approximately 2.1 billion board feet. Annual synergies of approximately $15 million are expected to be achieved within three years as a result of this transaction principally related to alignment of marketing programs as well as log procurement and operational practices.

"This strategic acquisition will enhance Vida's strong operating platform and provide further diversification into Central Sweden. These operations have access to exceptionally high-quality timber and are well positioned to complement Vida's high-value product offering," said Susan Yurkovich, President and Chief Executive Officer of Canfor.

Canfor anticipates financing this transaction largely with cash on hand and new equity from minority Vida AB shareholders. The transaction is expected to close over the next several months and is subject to customary closing conditions, including regulatory approvals.