Sino-Forest Corp on Tuesday said it acquired Homix Ltd, a Chinese company engaged in research and development and manufacturing of wood products, for about $7.1 million, sending the forest operator's shares to a two-year high.
Shares of Sino-Forest were up 3 percent at C$21.11 in afternoon trade on the Toronto Stock Exchange. They hit a two-year high of C$21.53 earlier in the day.
Sino-Forest, which mainly operates in China and owns significant plantations in that country, said the deal -- funded with cash on hand -- includes Homix's patents as well as its R&D laboratory and two engineered-wood production operations.
Homix specializes in curing, drying and dyeing methods for engineered wood and has the know-how to produce recomposed wood products and laminated veneer lumber, the company said in a statement.
Recomposed wood technology uses fibre from forest plantations, recycled wood and wood residue, which reduces the traditional use of large-diameter trees from natural forests. (Reporting by Ashutosh Joshi in Bangalore; Editing by Aradhana Aravindan)