Jax-based Rayonier Advanced Materials to acquire Canadian paper company
Rayonier Advanced Materials Inc. and Tembec Inc. announced recently a definitive agreement under which Rayonier Advanced Materials will acquire the Canadian-based paper company.
The deal is expected to close during the second half of this year, and the transaction received the unanimous approval of the Boards of Directors of both companies.
Rayonier has been looking to build their operation for a while and that was made possible through liquidating $92 million in costs over the last 30 months.
The acquisition will provide the combined company with leading and complementary positions in high purity cellulose end-uses and diversified earning streams from packaging, paper, and high-yield pulp and forest products businesses.
"This transaction advances our growth objective to pursue strategic acquisitions where we can leverage our core competencies to provide significant long-term shareholder return," said chairman, president and CEO of Rayonier Advanced Materials Paul Boynton. "By joining forces, we are diversifying our product offering. With pro forma revenue of US$ 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."
Rayonier's operation in Jacksonville has about 80 employees and two of the companies largest facilities are within a two hour drive. Those employees will not see any changes initially, but could see more opportunities for work and advancement with increased business once the deal is finalized.
"We have told our employees that their jobs are not going to change a whole lot with this acquisition," vice president of investor relations and treasurer for Rayonier Advanced Materials Mickey Walsh said. "We will be a bigger company and there are opportunities that will come with that."
The combined company expects to retain Canadian headquarters in Montreal, Québec and a presence in Ontario while continuing 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 facilities and operations to further enhance the company's growth potential and competitiveness.
With its expanded geographic reach, enhanced research and development capabilities, and broader more flexible asset base, the combined company says it will offer customers exceptional service and product options.
Rayonier Advanced Materials intends to finance the cash portion of the transaction with a combination of cash on hand and committed bank financing.
Written by Junior Skipple, Jacksonville Business Journal
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