GreenFirst agrees to sell two sawmills for approximately $90M
December 21, 2022 By GreenFirst
GreenFirst Forest Products Inc. has entered into a definitive agreement to sell its La Sarre and Béarn sawmills and its Abitibi and Témiscamingue forestry operations, as well as their related assets and business operations (the “Quebec Assets”) to Chantiers Chibougamau, a long-standing Quebec-based and family-controlled forestry company, for approximately $90 million in cash payable at closing, including approximately $40 million for specific working capital items (subject to customary closing adjustments). Quebec-based employees are expected to continue to be employed by Chantiers Chibougamau post-closing.
GreenFirst expects to use the net proceeds from the sale to strengthen its balance sheet and continue investing in its Ontario operations. The sale of the Quebec Assets is expected to close in Q1 2023.
The sale has been unanimously approved by GreenFirst’s Board of Directors and is subject to customary closing conditions, including receipt of applicable regulatory approvals and the Competition Act approval. The sale is not subject to any financing conditions. Under applicable corporate law, Chantiers Chibougamau has all approvals to conclude the transaction.
“This divestiture represents a unique opportunity to unlock shareholder value and concentrate on our operations in Ontario, where we will continue to focus and invest. We thank all of our dedicated Quebec-based employees for their longstanding effort and support. We are committed to ensuring a smooth transition to the family-based Chantiers Chibougamau. This transaction is a win-win for both Chantiers Chibougamau and GreenFirst as it strengthens the alignment of each company’s primary focus and growth strategies.” said Paul Rivett, chairman of GreenFirst.
BMO Bank of Montreal is acting as exclusive financial advisor to GreenFirst.
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