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    Breaking News

    Rayonier to Buy Tembec

    Purchase expands Rayonier's geographic reach

    Related CONTENT
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    05.30.17
    Rayonier Advanced Materials announced it will acquire Tembec, providing the combined company with leading and complementary positions in key high purity cellulose end-uses and diversified earning streams from packaging, paper, high-yield pulp and forest products businesses. 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.

    Tembec shareholders will have the right to elect to receive either (i) C$4.05 in cash or (ii) 0.2302 of a share of Rayonier Advanced Materials common stock, for each Tembec common share. These elections are subject to proration to ensure that no more than 63% of the aggregate Tembec shares shall receive the cash consideration and no more than 37% will receive the stock consideration.

    The purchase price of approximately $807 million, including the assumption of $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. For Tembec shareholders, the purchase price per share represents a 37% premium to its closing price on May 24, 2017.

    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.

    For Tembec, the transaction will:
    • Establish Tembec as part of a larger, more competitive organization with the resources to invest in its growth and a commitment to continue all operations and maintain a strong presence in Québec, Ontario and France.
    • Create compelling value for shareholders, including an attractive premium to market with immediate cash and the ability to participate in the combined company's future growth, and significant liquidity through share ownership in a broadly traded public company.

    For Rayonier Advanced Materials, the combination will:
    • Position Rayonier Advanced Materials as a stronger, more balanced company with a further diversified customer and operational base.
    • Be immediately accretive to earnings and shareholder value.
    • Benefit from enhanced economies of scale, and create projected combined cost synergies of $50 million.
    • Establish a global manufacturing footprint to enhance its competitiveness in international markets, and expand its pipeline of innovative products through R&D facilities in the U.S. and France.

    "This transaction advances our growth objective to pursue strategic acquisitions where we can leverage our core competencies to provide significant long-term shareholder return," says 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 $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."

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