The Bergs timber company has signed an agreement with the owners of Berg’s Timber-, Norvik, Norway, to acquire some companies owned by the Norvik group operating in Latvia, Estonia, and in the United Kingdom.

The letter of intent regarding this acquisition was signed by Berg’s Timber and Norvik on January 22, 2018. A review has been done by Bergs Timber to evaluate the companies together while Norvik has been evaluating the industrial logic behind the acquisition.

By this acquisition, Bergs Timber is expected to become a major player in the sawmill market with an increased capacity that appreciated from 530,000 m3 annually to approximately 920,000 m3.

The acquisition is also expected to enhance Bergs Timber’s processing capacity while making the company less vulnerable to the fluctuations in the industry’s markets.

While the company targets the Baltics, the new group will benefit from an extended raw material base while limiting the potential risks due to the costs of producing parts which is valued in Euros. Notable potentials for the business have been identified in areas such as commodity procurement, distribution, and sales. The acquisition is supposedly worth 170 million for the newly issued shares of Bergs Timber and a cash payment of SEK 270 million (approximately USD 32 million). The newly issued shares of Bergs Timber are expected to be fully released after a decision is made at the Extraordinary General Meeting which will be held on May 14, 2018.

Norvik owns the companies being targeted while controlling about 29.52% of the outstanding shares and votes in bergs Timber