The phased acquisition will take place over three years, with Canfor taking an initial 25% interest in Scotch Gulf, rising to 50% after 18 months and 100% at the end of the period.

Scotch Gulf’s operations have a combined capacity of 440 million board feet.

“This agreement provides access to an exceptional fibre base, increases our southern pine production capacity to more than a billion board feet and will improve our ability to serve our valued US customers,” said Canfor president and CEO Don Kayne.

The transaction is expected to be concluded in the third quarter.