Jemi Fibre sold to CanWel
March 11, 2016 - CanWel Building Materials Group Ltd. and Jemi Fibre Corp. announced that they have entered into a definitive agreement whereby CanWel will acquire all of the issued and outstanding common shares of Jemi Fibre.
The implied equity value of Jemi Fibre is approximately $11 million. CanWel also expects to assume total indebtedness of approximately $25 million and refinance approximately $50 million of Jemi Fibre’s senior loans through the Offering and new senior term loans committed by CanWel’s existing lenders.
Jemi Fibre is a vertically-integrated forest products company that operates primarily in British Columbia and Saskatchewan. Jemi Fibre owns approximately 136,000 acres of private timberlands, strategic crown licenses and tenures, log harvesting and trucking operations, several post and pole peeling facilities, two pressure-treated specialty wood production plants, and one specialty saw mill. The transaction will result in Jemi Fibre becoming a wholly-owned subsidiary of CanWel and will combine Jemi Fibre’s operations with CanWel’s established Canadian platform.
Amar Doman, Chairman and CEO of CanWel, commented “The transaction further solidifies our position in Canada as a leading manufacturer and distributor of building material and related products. The acquisition of vast timberland holdings and experienced operators strengthens our supply chain, guaranteeing access to raw material supply for our company. We also forge stronger relationships with our existing suppliers, who are customers of Jemi Fibre. We are very pleased to deepen our presence in Western Canada, and look forward to welcoming our new colleagues to the CanWel family and accelerating our offerings, presence and overall growth together”. Mr. Doman added “We are also very pleased to announce that The Futura Corporation will be participating on the Offering in the amount of $6 million, alongside other insiders.”
Mike Jenks, current Chairman and CEO of Jemi Fibre, added “We are extremely pleased to be joining the CanWel organization to establish a more stable operating platform. Joining CanWel allows us to be part of a larger entity with deep and effective sales and distribution channels, operating expertise and a strong balance sheet. We have worked hard building a highly strategic, valuable and integrated collection of assets, and look forward to continuing our company’s vision as part of CanWel.”
In addition to shareholder and court approvals, the transaction is subject to completion of the offering and repayment of Jemi Fibre’s senior loans, and the satisfaction of certain other closing conditions.