MONTREAL -- Resolute Forest Products Inc. has an agreement to buy three sawmills in Florida and Arkansas from Conifex Timber Inc. for about US$163 million cash.

The mills produce construction-grade lumber and decking products for distribution within the United States.

Vancouver-based Conifex says the transaction will allow it to repay its lumber segment credit facility in full and strengthen its balance sheet.

Montreal-based Resolute says nearly 25 per cent of its total production capacity will be in the southern U.S. after the Conifex mills are added.

It plans to complete about $20 million of upgrades at the mill in El Dorado, Ark., which has recently been idled, and gradually restart it by 2021.

Resolute also expects most of the employees at the three Conifex mills, including management, will be offered jobs at similar terms when the transaction closes. That's expected in the first quarter of 2020.