With its expanded geographic reach, enhanced R&D capabilities and broader, more flexible asset base, the combined company will offer customers exceptional product breadth across the spectrum of high purity cellulose products and create additional growth opportunities in packaging and forest products.
The transaction received the unanimous approval of the Boards of Directors of both companies. The purchase price of approximately US$807 million, including the assumption of US$487 million of debt net of cash, represents a multiple of 4.6 times LTM pro forma EBITDA after expected synergies or 6.3 times before synergies.
Maintaining Tembec’s operations and jobs in Canada and France
The Company expects to retain Canadian headquarters in Montreal, Québec and a presence in Ontario, and continue all Tembec operations. The Company will also proceed with Tembec’s recently announced four-year investment plan for its Québec facilities and make additional investments in other key facilities and operations to further enhance the Company’s growth potential and competitiveness.
Transaction serves the best interests of both companies
“This transaction advances our growth objective to pursue strategic acquisitions where we can leverage our core competencies to provide significant long-term shareholder return,” said Paul Boynton, Chairman, President and Chief Executive Officer of Rayonier Advanced Materials. “By joining forces, we are diversifying our product offering in high purity cellulose and expanding into the adjacent packaging and forest products markets with significant scale. With pro forma revenue of US$2 billion, the combined company will be poised to compete effectively in any market, benefit from greater product and geographic diversity, and provide an attractive value proposition for our shareholders.”
Mr. Boynton added, “Following the transaction, our solid capital structure will enable us to make high-return investments to support the growth of Tembec’s attractive businesses and product development capabilities to better serve customers. We look forward to working with Tembec’s exceptional team, unions and other stakeholders to realize the abundant opportunities ahead.”
An ideal partner, committed to Tembec’s people and operations
James Lopez, President and Chief Executive Officer of Tembec, said, “Rayonier Advanced Materials is the ideal partner for us, given the complementary nature of our products, expertise, and resources. They are committed to our operations and employees in Canada and France and—above all—to the values we share. This combination will enable us to sustainably grow our business for the benefit of our customers, employees and communities. We are pleased that our shareholders will be able to participate in the company’s future success through an ongoing equity ownership.”