Rayonier Advanced Materials Inc.
(NYSE: RYAM) (“RYAM”), a global leader in high purity
cellulose pulp, and GreenFirst Forest Products Inc. (TSXV: GFP)
(“GreenFirst”), a Canadian lumber company, announced today
that the parties have entered into a binding asset purchase
agreement (the “Agreement”) pursuant to which RYAM has
agreed to sell all of its lumber and newsprint facilities and
related assets located in Ontario and Québec. (the “Purchased
Assets”) to GreenFirst for an expected purchase price of
approximately US$214 million including inventory on hand at the
time of closing (the “Purchase Price”) which is payable
approximately 85% in cash, 15% common shares of the capital of
GreenFirst. In addition, a chip offset credit note will be issued
to RYAM by GreenFirst in the amount of CDN$7.9 million, which may
be set off against amounts owing to GreenFirst for chip purchases,
equally over the next 5 years. Notably, RYAM will retain all of the
cash generated by the Purchased Assets plus all softwood lumber
duties, including earned interest on the duties, paid to the U.S.
Department of Commerce through the closing date. RYAM estimates the
duties to be approximately $110 million at the time of closing.
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The Purchased Assets:
- include six lumber mills which are located in Chapleau,
Cochrane, Hearst and Kapuskasing in Ontario and in Béarn and La
Sarre in Québec as well as one newsprint mill located in
Kapuskasing, Ontario.
- produced 604 million board feet in 2020 with a combined
nameplate capacity of 755 million board feet and are capable of
producing a wide range of forest products used in residential and
commercial construction, including dimensional lumber, wood chips
and by-products.
- include the lumber and newsprint mills as well as certain real
property, machinery, inventory, permits, licenses and other related
assets.
- exclude accounts receivable and accounts payable.
RYAM and GreenFirst have also agreed to a 20-year residual fiber
supply agreement to meet the continued fiber sourcing needs of
RYAM’s High Purity Cellulose, High Yield and Paperboard operations
in Temiscaming, Québec. The closing of the Agreement, which is
expected to occur in the second half of 2021, but not prior to July
31, is subject to customary closing conditions, including receipt
of regulatory approvals, the transfer of forestry licenses and the
approval of the TSX Venture Exchange.
“This is a tremendous opportunity,” said Paul Rivett, Incoming
Chairman of GreenFirst Forest Products and Chairman of NordStar
Capital. “This represents a large step forward to our previously
announced strategy of building GreenFirst as focused on lumber,
newsprint and forestry investments. We are excited to be expanding
our manufacturing footprint through this investment and to
beginning a new chapter with all of Rayonier Advanced Materials’
sawmill and forestry employees in Ontario and Québec.”
“The sale of the lumber and newsprint businesses allows us to
divest non-core assets at an attractive valuation and positions
Rayonier Advanced Materials to further invest in the earnings
growth of our core High Purity Cellulose assets and its biofuture
while also reducing overall debt. Through our ongoing ownership in
GreenFirst, we expect to participate in further upside while
maintaining optionality to monetize at an appropriate time,” said
Paul G. Boynton, President and Chief Executive Officer of Rayonier
Advanced Materials. “I want to personally thank the lumber and
newsprint management team and employees for their dedicated work
for Rayonier Advanced Materials. We wish them well as they begin a
new chapter with GreenFirst.”
For Rayonier Advanced Materials, BofA Securities is serving as
financial advisor and McCarthy Tétrault LLP is serving as legal
counsel. For GreenFirst, RBC Capital Markets is serving as
financial advisor, NordStar Capital is serving as transactional
advisor, Norton Rose Fulbright Canada LLP is serving as legal
counsel and KPMG Transaction Services assisted with due
diligence.
GreenFirst shareholders are directed to GreenFirst’s standalone
press release issued today, which provides additional operational
and financial information concerning the transaction.
About Rayonier Advanced Materials
Rayonier Advanced Materials is a global leader of
cellulose-based technologies, including high purity cellulose
specialties, a natural polymer commonly found in filters, food,
pharmaceuticals and other industrial applications. The Company also
manufactures products for lumber, paper and packaging markets. With
manufacturing operations in the U.S., Canada and France, Rayonier
Advanced Materials employs approximately 4,000 people and generates
approximately $1.7 billion of revenues. More information is
available at www.rayonieram.com.
About GreenFirst Forest Products
GreenFirst is a forest-first business, focused on
environmentally sustainable forest management and lumber
production. We believe that sustainable forest planting and
harvesting, coupled with the long-term green advantage of lumber,
provide GreenFirst with significant cyclical and secular advantages
in building products. GreenFirst’s long-term pursuit is to be a
global leader in environmentally sustainable lumber. For more
information, please visit: www.gffp.ca
Forward-Looking Statements
Certain statements in this press release may constitute
forward-looking statements that reflect management’s expectations
regarding GreenFirst’s and Rayonier Advanced Materials’ future
growth, financial performance and business prospects and
opportunities, including in respect of the proposed transaction, as
of the date of this press release. For example, this release
includes, among others, forward-looking statements regarding
GreenFirst’s and Rayonier Advanced Materials’ expectations
regarding the anticipated benefits of the transaction; the future
performance of the underlying businesses; the impact of the
transaction on GreenFirst and its business; the anticipated receipt
of required regulatory approvals; and the anticipated timing for
closing the transaction. Generally, these forward-looking
statements can be identified by the use of forward-looking
terminology such as "anticipate", "believe", "plan", "forecast",
"expect", "estimate", "predict", "intend", "would", "could", "if",
"may" and similar expressions. However, the absence of these or
similar words or expressions does not mean a statement is not
forward-looking.
All such statements are made pursuant to the “safe harbour”
provisions of applicable Canadian securities legislation as well as
the “safe harbor” provisions of applicable U.S. securities law,
including without limitation the Private Securities Litigation
Reform Act of 1995 and other federal securities laws. These
statements reflect current expectations of management regarding
future events and operating performance and speak only as of the
date of this press release. In addition, forward-looking statements
are provided for the purpose of providing information about
management's current expectations and plans relating to the future.
Readers are cautioned that reliance on such information may not be
appropriate for other purposes.
By their nature, forward-looking statements require management
to make assumptions and are subject to inherent risks and
uncertainties. There is a significant risk that predictions,
forecasts, conclusions or projections will not prove to be
accurate, that management's assumptions may not be accurate and
that actual results, performance or achievements may differ
significantly from such predictions, forecasts, conclusions or
projections expressed or implied by such forward-looking
statements. We caution readers not to place undue reliance on the
forward-looking statements in this press release as a number of
factors could cause actual future results, conditions, actions or
events to differ materially from the targets, outlooks,
expectations, goals, estimates or intentions expressed in the
forward-looking statements.
These factors include, but are not limited to: general global
economic, market and business conditions; governmental and
regulatory requirements and actions by governmental authorities;
relationships with employees, customers, business partners and
competitors; and diversion of management time on the transaction.
There are also risks that are inherent in the nature of the
transaction, including failure to satisfy the conditions to the
completion of the transaction and failure to obtain any required
regulatory and other approvals (or to do so in a timely manner).
The anticipated timeline for completion of the transaction may
change for a number of reasons, including the inability to secure
necessary regulatory or other approvals in the time assumed or the
need for additional time to satisfy the conditions to the
completion of the transaction. As a result of the foregoing,
readers should not place undue reliance on the forward-looking
information contained in this news release concerning the timing of
the transaction.
GreenFirst and Rayonier Advanced Materials caution that the
foregoing list is not exhaustive of all possible factors, as other
factors could adversely affect our results.
When relying on forward-looking statements to make decisions
with respect to GreenFirst, Rayonier Advanced Materials and their
securities, investors and others should carefully consider the
foregoing factors and other uncertainties and potential events.
Neither GreenFirst and Rayonier Advanced Materials do not intend,
and disclaim any obligation, to update any forward-looking
statements, whether written or oral, or whether as a result of new
information or otherwise, except as may be required by law.
Neither TSXV nor its Regulation Services Provider (as that term
is defined in policies of the TSXV) accepts responsibility for the
adequacy or accuracy of this news release.
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version on businesswire.com: https://www.businesswire.com/news/home/20210412005334/en/
RYAM Media Ryan Houck 904-357-9134 RYAM Investors Mickey Walsh
904-357-9162 GFP Media & Investors Jonathan Lowenstein
416-642-6430
Greenfirst Forest Products (TSXV:GFP)
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