BORDERS-based sawmiller BSW Timber has bought a leading tree harvester in a deal it said created the largest forest products company in the UK.

BSW Timber has bought the Stirling-based Tilhill Forestry business from Finnish paper giant UPM as part of its plans to capitalize on booming demand for timber products amid the economic recovery.

The price of the deal was not disclosed.

However, BSW’s chief executive Tony Hackney described the acquisition as significant.

The latest accounts for Tilhill filed at Companies House show the business had net assets of around £40m at the start of this year.

The company recently said the long-term future for timber looked bright given predicted dramatic growth in private and public sector housing in coming years, although the strong pound had posed challenges for firms in the UK.

“BSW is a growing enterprise and this acquisition is a key component of BSW’s vision for future development,” said Mr Hackney.

The deal underscores BSW’s confidence in the prospects for the timber market following a period of strong growth at the firm.

Owned by the Brownlie family, BSW doubled profits to £5m in the year to March 2014 when sales surged 15 per cent annually to £185m.

Announcing the deal yesterday, BSW Timber described itself as a £210m business, producing 1.2 million cubic metres of sawn timber each year, mainly for the UK’s construction, fencing and landscape market.

As Tilhill is one of the main providers of trees for BSW, the acquisition will help the company ensure the security of supplies of its most important input.

BSW will expect to benefit from the profit margin Tilhill is able to obtain on its sales.

Mr Hackney said: “The acquisition marks the beginning of a strengthened partnership in the forest industry that will deliver quality from beginning to end - from creating new forests through to producing timber end products.”

Tilhill, which manages forests across the UK, will continue to supply other firms.

The customer base will include UPM, which bought the company in 1996 to secure supplies for its paper production plants.

UPM operates the Caledonian paper mill at Irvine, Ayrshire.

Tilhill’s 200 employees will join BSW.

Tilhill was founded as a seedling nursery in 1948 by a Scot Archie Aitkins after he worked as a forestry lecturer at Aberdeen University.

Mr Aitkins started the business in Surrey and set up a Scottish operation at Old Sauchie in Stirling in the early 1960s.

On his retirement in 1981 Mr Aitkins sold Tilhill to the Rolls Royce Pension Fund.

The company has offices across Scotland from Inverness to Dumfries.

With headquarters in Berwickshire, BSW operates seven sawmills across the UK, including four in Scotland, and one in Latvia. It employs 1,000 people in mainly rural areas.