Slide 1: Acquisition of Simpson Sawmills
ACQUISITION OF SIMPSON SAWMILLS DECEMBER 18, 2014
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Information contained herein constitutes forward-looking statements. Forward-looking statements, which include all statements that are not historical facts, are subject to certain risks and uncertainties that could cause actual results to differ materially from those antic
Slide 3: Acquisition Summary
ACQUISITION SUMMARY • The Simpson assets include 4 sawmills • Meldrim, Georgia • Georgetown, South Carolina • Longview, Washington State • Commencement Bay, Washington State • Combined capacity of 750 MMBf - 2014 production estimated at 555 MMbf • Strong operational fit with Interfor’s platform • Ge
Slide 4: Simpson Mill Overview
SIMPSON MILL OVERVIEW US Southeast Operations Georgetown, SC • Project underway to add dual path kilns – would increase production from 2014E of 90 MMbf to 120 MMbf by late 2015 • Modest additional capital to increase production to 150 MMbf Meldrim, GA • Strong fit with Baxley and Swainsboro • Poten
Slide 5: Deal Terms
DEAL TERMS • Purchase price comprised of: • Cash price of US$94.7 mm plus working capital at closing (estimated at approximately US$30 mm) • Contingent future cash payments tied to the financial performance of the Commencement Bay sawmill over the next three years • Contingent future payments: • The
Slide 6: Economic Summary
ECONOMIC SUMMARY • Two separate economic assessments of the business, as follows: 1. Meldrim, Georgetown and Longview combined • 2014E production of approximately 390 MMbf • Mill level EBITDA1 (unaudited) • US$16 mm for 9 months ended 9/30/14 • Implied valuation multiples • Enterprise Value/Annualiz
Slide 7: Pro Forma '14 Production > 2.8 Bbf/Year
PRO FORMA ‘14 PRODUCTION > 2.8 Bbf/YEAR Quarterly Lumber Production 2010 - 2014 MMbf 750 700 Pro Forma Simpson 650 600 550 500 450 400 350 300 250 200 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2011 2012 2013 2014 7
Slide 8: 4th Largest Lumber Producer
4th LARGEST LUMBER PRODUCER NA Lumber Production by Company 5.0 4.0 2013 Pro Forma Simpson Production 3.0 Bbf 2.0 1.0 0.0 Source: Wood Markets monthly – March 2014 Notes: (1) Interfor’s 3Q 2014 production annualized (2) GP includes Temple-Inland. 8
Slide 9: Balanced Profile Across the Regions
BALANCED PROFILE ACROSS THE REGIONS • Approximately 2/3 of Interfor’s pro forma capacity will be in the US 2014 Actual Capacity 2014 Pro Forma Capacity BC Coast BC Coast 13% BC Southern 10% BC Southern Interior US Southeast Interior BC 23% 23% 30% Southern Interior 33% US Southeast US Southeast 37%
Slide 10: Interfor's Capital Structure
INTERFOR’S CAPITAL STRUCTURE • On Dec. 17th, Interfor closed a US$50 mm term debt financing with Prudential -- 4.02%, with final maturity in 2023 • Total of US$100 mm of long term debt is now place • Bank credit facilities remain at same level following the Prudential financing • Interfor has suffic
Slide 11: Questions
QUESTIONS A INTERFOR Building Value... 11