02/10/2014 07:21 EST | Updated 04/12/2014 05:59 EDT

International Forest Products shares hit new record highs after U.S. deal

VANCOUVER - Shares of International Forest Products Ltd. (TSX:IFP.A) gained more than 10 per cent Monday following a US$180-million purchase in the U.S. Southeast that will grow its capacity 20 per cent.

The Vancouver-based company said the Tolleson lumber business that it's buying from a Russian company will make Interfor one of the top five lumber producers in North America.

Interfor shares were up C$1.58 at C$16.78 in Monday afternoon trading — well above the previous high of C$15.85 set at the end of January.

Tolleson's current owner, Ilim Timber Continental SA of St. Petersburg, Russia, will receive US$129.9 million in cash and 3.68 million shares of Interfor, in return for the U.S. business operations which include two sawmills and a manufacturing plant in Georgia.

The Tolleson operations are about 120 kilometres from Interfor's current operations in the state and the company expects more than US$5 million of annual cost-savings through the deal.

Interfor says it will work with Ilim Timber to evaluate the potential for various joint international marketing initiatives.

Besides its main holdings in Russia, Ilim has production and offices Germany and an office in China.