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Industry & Trends

Rayonier Sells Six Lumber Mills to GreenFirst Forest Products


April 15, 2021 | Bill Esler

News Release

Jacksonville FL — Rayonier Advanced Materials Inc. (NYSE: RYAM), a producer of high purity cellulose pulp, and GreenFirst Forest Products Inc. (TSXV: GFP), a Canadian lumber company, entered into a binding asset purchase agreement.

Under the terms of the deal, Rayonier has agreed to sell all of its lumber and newsprint facilities and related assets in Ontario and Québec to GreenFirst for an expected purchase price of approximately $214 million (in U.S. dollars) including inventory on hand at the time of closing, payable 85% in cash and 15% common shares of the capital of GreenFirst.

In addition, a wood chip offset credit note will be issued to Rayonier by GreenFirst in the for $7.9 million (in Canadian dollars), which may be set off against amounts owed to GreenFirst for wood chip purchases, equally over the next five years. Notably, Rayonier 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. Rayonier estimates the duties to be approximately $110 million at the time of closing.

Six lumber mills, located in Chapleau, Cochrane, Hearst and Kapuskasing in Ontario and in Béarn and La Sarre in Québec, as well as a Kapuskasing, Ontario newsprint mill, are included in the purchase. The lumber mills 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.

Certain real property, machinery, inventory, permits, licenses and other related assets, excluding accounts receivable and accounts payable, also are included.

Rayonier and GreenFirst have also agreed to a 20-year residual fiber supply agreement to meet the continued fiber sourcing needs of Rayonier’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 Toronto Stock Exchange.

“This is a tremendous opportunity,” says 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 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,” says Paul G. Boynton, president and CEO 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.”

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.

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.


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