On Tuesday, real estate and timberland management company Rayonier (NYSE: RYN ) announced it is selling one of its four operating divisions, its wood products division, to Vancouver, Canada-based International Forest Products Limited (Interfor). Hereafter, says Rayonier, its manufacturing operations will focus more intensively on specialty chemicals.
The wood products division consists of three lumber mills in Georgia with a combined annual capacity of 360 million board feet of southern pine dimension lumber. They generate about $10 million in annual operating income. The sale, priced at $80 million, is expected to net Florida-based Rayonier a $40 million profit after taxes. As part of the deal, which is structured as an assets sale, Interfor has agreed to hire all 260 employees of the wood products division.
Prior to this transaction, Interfor had focused its lumber and wood products business in the Northwest U.S. and in Canada. In a press release describing the deal, Interfor noted that this purchase gives the company its first manufacturing presence in the U.S. Southeast. The acquisition will bring Interfor's annual capacity to more than 2 billion board feet. The deal is subject to regulatory approval and is scheduled to close in late February or early March.