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GreenFirst Forest Products to acquire six lumber mills in Ontario and Quebec

April 12, 2021  By Rayonier Advanced Materials

Rayonier Advanced Materials Inc. (RYAM), a global leader in high purity cellulose pulp, and GreenFirst Forest Products Inc., a Canadian lumber company, announced today that the parties have entered into a binding asset purchase agreement pursuant to which RYAM has agreed to sell all of its lumber and newsprint facilities and related assets located in Ontario and Québec to GreenFirst for an expected purchase price of approximately US$214 million including inventory on hand at the time of closing, which is payable approximately 85 per cent in cash, 15 per cent common shares of the capital of GreenFirst.

In addition, a chip offset credit note will be issued to RYAM by GreenFirst in the amount of CDN$7.9 million, which may be set off against amounts owing to GreenFirst for chip purchases, equally over the next five years. Notably, RYAM will retain all of the cash generated by the purchased assets plus all softwood lumber duties, including earned interest on the duties, paid to the U.S. Department of Commerce through the closing date. RYAM estimates the duties to be approximately $110 million at the time of closing.

The purchased assets:

  • include six lumber mills which are located in Chapleau, Cochrane, Hearst and Kapuskasing in Ontario and in Béarn and La Sarre in Québec as well as one newsprint mill located in Kapuskasing, Ont.
  • produced 604 million board feet in 2020 with a combined nameplate capacity of 755 million board feet and are capable of producing a wide range of forest products used in residential and commercial construction, including dimensional lumber, wood chips and by-products
  • include the lumber and newsprint mills as well as certain real property, machinery, inventory, permits, licenses and other related assets
  • exclude accounts receivable and accounts payable.

RYAM and GreenFirst have also agreed to a 20-year residual fibre supply agreement to meet the continued fibre sourcing needs of RYAM’s high-purity cellulose, high yield and paperboard operations in Temiscaming, Que. The closing of the agreement, which is expected to occur in the second half of 2021, but not prior to July 31, is subject to customary closing conditions, including receipt of regulatory approvals, the transfer of forestry licenses and the approval of the TSX Venture Exchange.


“This is a tremendous opportunity,” said Paul Rivett, incoming chairman of GreenFirst Forest Products and chairman of NordStar Capital. “This represents a large step forward to our previously announced strategy of building GreenFirst as focused on lumber, newsprint and forestry investments. We are excited to be expanding our manufacturing footprint through this investment and to beginning a new chapter with all of Rayonier Advanced Materials’ sawmill and forestry employees in Ontario and Québec.”

“The sale of the lumber and newsprint businesses allows us to divest non-core assets at an attractive valuation and positions Rayonier Advanced Materials to further invest in the earnings growth of our core high purity cellulose assets and its biofuture while also reducing overall debt. Through our ongoing ownership in GreenFirst, we expect to participate in further upside while maintaining optionality to monetize at an appropriate time,” said Paul G. Boynton, president and chief executive officer of Rayonier Advanced Materials. “I want to personally thank the lumber and newsprint management team and employees for their dedicated work for Rayonier Advanced Materials. We wish them well as they begin a new chapter with GreenFirst.”

For Rayonier Advanced Materials, BofA Securities is serving as financial advisor and McCarthy Tétrault LLP is serving as legal counsel. For GreenFirst, RBC Capital Markets is serving as financial advisor, NordStar Capital is serving as transactional advisor, Norton Rose Fulbright Canada LLP is serving as legal counsel and KPMG Transaction Services assisted with due diligence.

GreenFirst shareholders are directed to GreenFirst’s standalone press release issued today, which provides additional operational and financial information concerning the transaction.

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