Exclusive: CVC, Kronospan in joint bid for West Fraser Timber, sources say

Private equity firm CVC Capital and wood panel manufacturer Kronospan have submitted a joint expression of interest to acquire Canadian lumber company West Fraser Timber Co, people familiar with the matter said on Tuesday.

Shares in West Fraser, which has a market capitalization of C$10.6 billion ($8.2 billion), rose 25% in pre-market trading on the news.

CVC and Kronospan have informed West Fraser’s management they would like to proceed with deal negotiations, the sources said. The acquisition terms they proposed could not be learned.

There is no certainty that the parties would agree to any deal, the sources said, asking not to be identified because the matter was confidential.

CVC declined to comment, while West Fraser and Kronospan did not immediately respond to requests for comment.

The acquisition interest in West Fraser follows a two-year rally in its shares, as more people isolating and turning to home improvement during the COVID-19 pandemic led to a surge in demand for products such as lumber and plywood.

The housing market was boosted more broadly by people seeking more space as they worked from home.

But the company also faces headwinds. It said in its most recent earnings call in April that it had been struggling to fulfill orders because of transport and logistics problems in Western Canada that have persisted in the pandemic.

Privately held Kronospan, run by Austrian businessman Peter Kaindl, is a European maker of wood panels such as particle board and laminate flooring. CVC has 125 billion euros ($128 billion) in assets under management, according to its website


WOW! Fascinating development. Also a great buy for CVC Capital and Kronospan as Mills are trading at a discount given higher lumber prices are not baked in. Thanks for braking the story on Pakira @Rithika_Krishna!


Very interesting trend taking place in BC these days. With many BC based groups expanding east such as Interfor with the purchase of Eacom in Ontario and Quebec and Teal Jones building a greenfield project in Mississippi close to the 3 other SYP mine mills they own and operate in the south east. It appears that most are expanding outside of the province.

With the West Fraser message indicating that they have not yet received the offer, we will just have to wait and see what else will take place on Canada’s west coast.