GreenFirst Forest Products to acquire Rayonier’s lumber mills

Rayonier Advance Materials and GreenFirst Forest Products Inc. (GreenFirst), a Canadian lumber company, announced that the parties have entered into a binding asset purchase agreement in which Rayonier has agreed to sell all of its six lumber and one newsprint facilities and related assets located in Ontario and Quebec to GreenFirst for an expected purchase price of approximately $214 million (USD), including inventory on hand at the time of closing, which will be payable in approximately 85% cash, 15% common shares of capital GreenFirst.

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 TSX Venture Exchange.

In a prepared statement Paul Rivett, incoming Chairman of GreenFirst Forest Products and Chairman of NordStar Capital said, “This is a tremendous opportunity. 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.”

Paul G. Boynton, President and Chief Executive Officer of Rayonier Advanced Materials in his comments said, “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.”