The $100 million investment will be funded via a $145 million equity raising scheme, structured as a fully underwritten one-for-four non-renounceable pro-rata entitlement offer.

Shares in the scheme will be offered at 90 cents per share.

Gunns stock finished trading on the Australian Securities Exchange at $1.14 last week.

Gunns told the ASX that the acquisition included two manufacturing locations in Victoria and two in Tasmania, a sales base throughout Australia and a 50 per cent stake in Smartfibre, a joint venture with fellow Launceston-based company Forest Enterprises Australia.

``This acquisition creates a business with significant scale and a distribution footprint across Australia and South East Asia and the ability for the group to strengthen its presence in the most viable `wood baskets' in Australia,'' Gunns chairman John Gay said.

Mr Gay said the balance of funds to be raised in the equity raising would ``provide Gunns with the flexibility to pursue other potential acquisitions in the plantation sector or alternatively reduce debt''.

It is understood that other acquisitions would include the plantation estate of failed Managed Investment Scheme company Timbercorp - which was the hot tip to have been announced today after Gunns announced a trading halt to the ASX on Friday.

In the release to the ASX, Gunns also announced a $56.2 million full-year profit, down almost five per cent on the previous year.

But, it did not provide an insight into the progress of its discussions with a joint venture partner or financier for its $2.2 billion pulp mill - other than to say negotiations were ``continuing positively''.

Read more in The Examiner tomorrow.