Nexfor Inc’s panelboard business is to be separated from the rest of the company and renamed Norbord Inc.
The development is part of Nexfor’s plan to maximise the value of its businesses to shareholders by creating two distinct and independent companies – a speciality papers and timberlands business, and a wood-based panel operation.
A new publicly-traded company, Fraser Papers, will have US$850m sales, one million acres of freehold timberland, 780,000 tonnes of paper production and 355,000 tonnes of market pulp. The panelboard business, the core of Nexfor’s growth since 1998, will become the sole focus for the company’s management and strategic direction.
President and CEO Dominic Gammiero said: “We believe that separating the two businesses at this time will be financially beneficial to both and moreover, will unlock value for shareholders.”
The changes are subject to a favourable tax ruling, plus shareholder and other approvals. A special meeting of shareholders will take place in late June, with changes expected to take effect on July 1.
The panelboard business, which recorded US$1.1bn sales in 2003, has 15 operations in the US, Canada and the UK, manufacturing and marketing OSB, MDF, particleboard, hardwood plywood, I-joists and a range of value-added products.