Conifex acquires lumber shipping business and other assets for more than $1.6 million

VANCOUVER – Conifex Timber Inc. (TSXV:CFF) says it will buy two privately owned lumber distribution and shipping businesses for at least $1.6 million.

The small Vancouver lumber producer said late Wednesday it had struck a definitive deal to acquire the commodity lumber operations of Welco Lumber Corp. and the transportation and logistics business of its Navcor subsidiary.

The pricetag of the deal is just under $1.6 million in addition to some inventory and the payment of some commissions for three years.

Under the deal, expected to close by the end of the year, Welco will keep its Marathon Forest Products Ltd. business.

Get weekly money news

Get expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday.

Sign up for weekly money newsletter Get Started

By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy.

Conifex said the deal will help it “seamlessly continue to serve its customers in the United States, China, Japan and elsewhere.”

Welco and Navcor have provided lumber marketing and shipping to Conifex under contract since early 2009. Brad Johansen, a member of the Conifex board, is also president and CEO of Welco.

Conifex operates sawmills at Fort St. James and Mackenzie, B.C. , which together have the capacity to produce 745 million board feet of lumber a year.

The company also has a bioenergy power plant at the Mackenzie mill.

In its last financial report, Conifex said its second quarter was marked by weakness in the U.S. house construction industry, the higher value of the Canadian dollar and increased costs for shipments to its Asian customers.

The company posed a $3.6 million net loss in the second quarter, up from $2.4 million a year earlier.

Revenue more than doubled to $26.9 million from $12.6 million .

The company’s lumber segment, which contributed most of the revenue, shipped 81.5 million board feet _ up 138 per cent from the same quarter last year. However, lower unit prices limited the increase in revenue to 105 per cent.

Conifex reports its third quarter results next week.