Sawmill group Glennon Brothers is buying rival Balcas in a deal that will create a business with revenues of almost €270 million.
Glennon Brothers, owner of timber-processing plants in Ireland and Scotland, has agreed to buy Co Fermanagh-based Balcas from owner SHV Energy, subject to approval from competition regulators.
Balcas operates a sawmill near Enniskillen, making timber products used in building, farming and packaging, along with renewable energy plants at its Co Fermanagh base and in Invergordon in Scotland.
Glennon Brothers has sawmills in counties Cork and Longford and Troon in Scotland, which supply the Irish and British construction markets.
The company's joint managing director, Mike Glennon, said the Fermoy-based business had a turnover of €150 million a year while Balcas's revenues were £100 million (€116 million).
Glennon Brothers employs more than 500 workers while Balcas has a staff of 380. Mr Glennon said that the enlarged group would retain all employees.
“From our perspective, bringing both businesses together would allow us to consider much bigger investments, particularly in research and development,” he explained.
The acquisition of Balcas would expand Glennon’s reach into renewable energy, wood pellet production for fuel and products such as fence posts.
Glennon’s history dates back to 1913. The company has expanded through growing its existing businesses and buying other operations.
Both the Republic's Competition and Consumer Protection Commission and the UK's Competition and Markets Authority will have to approve the deal, as Balcas is based in Northern Ireland. Those procedures could take up to three months.
The deal comes as the Irish forestry industry continues to wrestle with licensing delays that have left the Republic short of timber supplies.
All forestry activity in the State must be licensed by the Department of Agriculture, Food and the Marine.
In total, there are 6,300 applications for felling, planting and road building permits with the department. The industry calculates that this could take 80 to 100 weeks to process.
Mr Glennon noted on Thursday that his company has trebled the amount of timber that it ships in to Ireland from its Scottish operations to allow it supply demand here. The crisis also hit Balcas, which draws part of its supplies from the Republic.
A recent Forestry Service decision to increase the area for environmental impact statements on Natura sites, designated by the EU as habitats or breeding grounds for endangered species, to 15km from 3km has created further problems, the industry says.
In a statement on Thursday, Mr Glennon said his company looked forward to welcoming Balcas to the group. Joint managing director Pat Glennon described the deal as "another milestone" in the business's history.
Brian Murphy, chief executive of Balcas, said the company was excited to be joining Glennon Brothers.