Canadian lumber producer Interfor reached an agreement with Georgia-Paific Wood Products and GP Wood Products to acquire for sawmill operations in Bay Springs, Miss., Fayette, La., DeQuincy, La., and Philomath, Ore. The total purchase price of $375 million, which includes working capital, will be funded entirely from cash on hand.

The sawmill operations are complementary to Interfor’s existing platforms in the U.S. south and northwest, according to the company. Interfor said the acquisition will support accelerated growth and enhance its position to benefit from robust market conditions.

“This acquisition enhances Interfor’s growth-focused strategy as a pure-play lumber producer, and provides significant economies of scale given the complementary geographic fit with our existing U.S. operations,” Ian Fillinger, president and CEO of Interfor, said in a news release. “We’re excited to acquire these high-quality assets as part of our balanced approach to capital allocation to drive shareholder value.”

The acquired sawmill operations have a combined annual lumber production capacity of 720 million board feet and the Bay Springs, Fayette, and Philomath sawmills are currently operating on a full-shifting basis. The DeQuincy sawmill, which was idled during the COVID-19 pandemic in May 2020, has an annual capacity of 200 million board feet. Interfor is currently evaluating its strategy and options for the DeQuincy mill, including restart plans.

After the acquisitions, Burnaby, British Columbia-based Interfor’s total annual lumber production capacity will increase to 3.9 billion feet on a pro-forma basis. Of Interfor’s 3.9 billion board feet capacity, 77% will be U.S. based and not subject to softwood lumber duties. The company’s U.S. South production capacity will grow by 500 million board feet to 2.2 billion and production capacity in the U.S. northwest will grow by 220 million to 770 million board feet.

The sawmill operations, excluding the DeQuincy sawmill, generated $53 million of EBITDA in the first quarter of 2021.