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Wed, Feb 8, 2023 08:02
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Interfor Completes Acquisition of Chaleur Forest Products and Announces Additional Long Term Debt Financing

BURNABY, British Columbia (News release) -- Interfor announced that it has completed the previously announced transaction to acquire 100% of the equity interests in the entities comprising Chaleur Forest Products ("Chaleur") in New Brunswick, Canada from an affiliate of the Kilmer Group.

Interfor also announced that it has priced US$200 million in additional long-term debt financing with Prudential Private Capital. The senior secured notes will carry an annual interest rate of 7.06% and have a final maturity in 2033. All other terms remain consistent with Interfor's existing senior secured notes. The financing is expected to close in early December and the proceeds will be used to finance the Chaleur acquisition and for general corporate purposes.

Following completion of the financing, Interfor's long-term debt will have a weighted average interest rate of 5.30% with laddered maturities principally spanning 2024-2033.

Interfor continues to have significant financial flexibility to execute its strategic capital investment plans and consider additional value-creating capital deployment options. As of October 31, 2022 Interfor had a Net Debt to Invested Capital ratio of approximately 10%. Proforma the Chaleur acquisition and the additional long-term debt financing, Interfor's proforma Net Debt to Invested Capital ratio as of October 31, 2022 would be approximately 22% 1. Similarly, proforma liquidity as of October 31, 2022, comprising cash on hand and amounts available under its existing revolving credit facility, would be approximately C$520 million, before consideration of potential additional borrowing capacity that may be available within existing credit limits.

1 Proforma is based on C$325 million base purchase price, plus approximately C$50 million for countervailing ("CV") and anti-dumping ("AD") duties, working capital and other items, all of which are subject to final post-close adjustments.

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