Rayonier Advanced Materials is selling its Matane, Que., pulp mill and related assets to Sappi Limited, a global diversified wood fibre company, for a purchase price of approximately US$175 million.
The mill produces approximately 270,000 metric tonnes of high-yield pulp and sells the product globally for use in manufacturing paperboard, packaging, printing and writing paper. The Matane mill was acquired by Rayonier as part of its acquisition of Tembec Inc. in November 2017.
Rayonier will continue to manufacture and sell approximately 240,000 metric tonnes per year of high-yield pulp out of its Témiscaming facility.
Rayonier Advanced Materials is a developer of cellulose-based technologies, including high purity cellulose specialties. With manufacturing operations in Canada, the U.S. and France, Rayonier employs approximately 4,200 people and had revenues of US$2.1 billion in 2018. Rayonier is continuing its previously-announced review of its commodity asset portfolio and will provide information on any additional actions when this review is concluded.
“As part of our portfolio evaluation, the sale of the Matane mill allows us to divest a non-core asset while providing our stockholders with fair value,” says Paul G. Boynton, Chairman, President and CEO of Rayonier Advanced Materials. “I want to personally thank the Matane management team and employees for their dedicated work for Rayonier Advanced Materials. We wish them well as they begin a new chapter with Sappi.”
A manufacturer of paper, paper pulp and dissolving wood pulp solutions, Sappi Limited is headquartered in Johannesburg, South Africa and has over 12,000 employees with nine mills in Europe, three mills in America and four mills in South Africa.
“This acquisition will provide Sappi with both cost reductions and decreased volatility at a very competitive price per ton of pulp. Indeed, this is a more cost effective and efficient approach than building additional internal capacity for our North American and European mills,” says Steve Binnie, CEO of Sappi Limite. “I am very pleased that we have taken another significant step towards realizing our 2020Vision goal.”
Mark Gardner, CEO Sappi North America, says, “The acquisition eliminates the need to invest in a pulp expansion project at the Somerset Mill, which for the same investment would have delivered significantly less pulp. At the same time, this acquisition provides us with a healthy market pulp business with a strong customer base. We will work with our new customers during the transition and will of course honour all contractual commitments.”
The Matane transaction, which is expected to close in the fourth quarter, is subject to customary closing conditions, including receipt of regulatory approvals.
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