Mercer Purchases Germany’s HIT

Mercer International Inc. has entered into an agreement to acquire all of the outstanding shares of the parent company of HIT (Holz Industrie Torgau) for €270 million. HIT owns, among other things, 100% of a timber processing and value-add pallet production facility in Torgau, Germany and a wood processing facility in Dahlen, Germany that produces garden products.

The HIT facility is a modern, high performance, fully integrated wood processing facility and its production capabilities include wood pallets, lumber, biofuels (briquettes and pellets), garden products and bio-electricity. HIT is the world’s largest producer of EPAL wood pallets used for shipping and, in 2021 sold 295MMBF of wood pallets. Sawmill residuals are used to produce biofuels in the form of wood pellets and briquettes. HIT has the ability to process up to 410MMBF of lumber today, with various potential high return investment opportunities to expand capacity.

The acquisition includes five biomass-fueled power plants with the ability to generate up to 15 MW of electricity.

Post-acquisition, Mercer becomes the largest German pallet producer and will have a combined annual lumber capacity of approximately 960MMBF with incremental electricity generation capacity.

The European flat wooden pallet market traditionally focuses on block pallets. The largest share of the European wood pallet market are standard format block pallets, most of which are part of exchange and pooling systems. Within the German market, 80% of wood pallets are exchanged in open pooling systems, while 20% are exchanged in closed pooling systems.

Mercer International Inc. is a global forest products company with operations in Germany, U.S. and Canada with a consolidated annual production capacity of 2.3 million tonnes of pulp, 550MMBF of lumber, and 140 thousand cubic meters of cross-laminated timber.