Rayonier Advanced Materials signed a definitive agreement to acquire Tembec. According to the announcement, the transaction will provide 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. The transaction received the unanimous approval of the Boards of Directors of both companies.
The purchase price of approximately USD807 million, including the assumption of USD487 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
Tembec shareholders will have the right to elect to receive either CAD4.05 in cash or 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.
In 1Q2017 Rayonier Advanced Materials reported 7.8% decrease of net sales and 11.1% decrease of pro-forma EBITDA. Tembec for the same period decreased EBITDA margin to 9.3%.
The company is a manufacturer of forest products – lumber, pulp, paper and specialty cellulose. Its core operations are located in Canada and France. Annual sales total approximately CAD 1.5 billion. Tembec has around 3,000 employees.
About Rayonier Advanced Materials:
The company is the leading global supplier of high-purity, cellulose specialties natural polymers for the chemical industry. It engineers natural polymeric chemical chains to create dozens of customized high-purity performance fibers at its plants in Florida and Georgia. The company’s facilities can produce up to 675,000 metric tons of cellulose specialties products annually for use in a wide range of industrial and consumer products such as filters, cosmetics and pharmaceuticals. Upon completion of the previously announced strategic realignment of assets in Jesup, the company’s facilities will have the capacity to produce approximately 485,000 tons of cellulose specialties and approximately 245,000 tons of commodity products.