Conifex Timber entered a definitive purchase agreement with Oregon-based Hampton Lumber for the sale of Conifex’s Fort St. James sawmill in British Columbia, Canada. The purchase price of the facility is approximately $39 million, plus the market value of finished lumber and log inventory at the time of closing, according to a news release.

Ken Shields, Conifex chair and CEO, said there was not enough sufficient supply available to maintain the manufacturing base at Fort St. James. “The decision we have taken to sell the mill was extremely difficult; however, we are encouraged by Hampton’s plans for the site,” Shields said. “We believe this transaction supports the Province’s objectives for industry rationalization that is mindful of the impacts on people, communities, and First Nations.”

Hampton Lumber currently operates nine sawmills in Oregon, Washington, and British Columbia. Hampton Lumber CEO Steve Zika said that while economic conditions are currently challenging in British Columbia, the company believes the long-term outlook for Canadian lumber is promising.

“We intend to build a new sawmill in Fort St. James and look forward to building relationships with local First Nations and other community partners similar to a successful joint venture we have with the Burns Lake Native Development Corporation in the Burns Lake area,” Zika said in a statement.

Due to uncertain conditions, Conifex does not expect to resume normal operations at the Fort St. James mill prior to the closing of the transaction. Proceeds from the sale will be primarily used to retire debt and provide additional liquidity so Conifex can better optimize performance and value at its other locations, according to the news release.