In another sign that investors are seeking value plays in the beaten down lumber sector,
International Forest Products Ltd. (
TSX: T.IFP.A,
Stock Forum) said Wednesday it is raising $75 million from a bought deal financing.
The Vancouver based company said it will issue 6.2 million class a subordinate voting shares priced at $12 a share to an underwriting syndicate led by RBC Capital Markets and Raymond James.
Net proceeds of the offering will be used to complete a number of high return capital projects and to enhance the company’s ability to pursue additional strategic initiatives,
said Interfor in a press release.
On Wednesday, the company’s shares were priced at $12.48, leaving the company with a market cap of $697.2 million, based on 55.8 million shares outstanding. The 52-week range is $12.46 and $5.60.
News of the financing comes on the heels of an announcement last week that
Louisana-Pacific Corp. (
NYSE: LPX,
Stock Forum) is taking over the quality mills of
Ainsworth Lumber Co. Ltd. (
TSX: T.ANS,
Stock Forum) in a US$1.1 billion deal worth $3.76 per Ainsworth share.
Late last month, private equity firm Kelso & Co. acquired almost 12 million shares that it didn’t already hold in Eacom Timber Corp., a Montreal-based company with lumber and sawmill assets in eastern Canada.
Kelso agreed to pay 38 cents each for the Eacom shares.
For its part, Interfor recently reported second quarter earnings of $15.8 million or 28 cents a share, up from $100,000 or $0.00 per share in the second quarter of 2012.
Sales in the quarter were a record $274.7 million, an improvement of $49.3 million compared to the year earlier quarter.
The company attributed its improved results to record lumber shipments, higher North American pricing and higher demand and pricing in China and Japan.
The U.S. housing market is projected to continue a gradual recovery through the balance of 2013, Interfor has said.
“Lumber prices have firmed in recent weeks and are expected to increase with the recovering U.S. housing market,’’ the company added.