Tembec has received a friendly takeover offer from Rayonier Advanced Materials, a Florida-based chemical company, in a deal that values the Quebec lumber giant at US$807 million, including assumed debt.
Read the complete news release.
The merged entity would keep a Canadian headquarters in Montreal, with the main corporate office in Jacksonville, Fla., both firms said in a joint statement Thursday.
"Rayonier Advanced Materials is the ideal partner for us, given the complementary nature of our products, expertise, and resources," Tembec CEO James Lopez said.
"They are committed to our operations and employees in Canada and France and — above all — to the values we share."
Tembec shareholders (TSX:TMB) are being offered C$4.05 in cash or 0.2302 of a share in Rayonier Advanced Materials, subject to a cap on the total amount of cash or shares that will be issued. The purchase price is 37 per cent above the Wednesday closing price for Tembec on the Toronto Stock Exchange.
Shares in Tembec soared on the news Thursday, up 40.3 per cent to $4.14 on the Toronto Stock Exchange about an hour after the opening bell.
The transaction comes as Tembec, like other Canadian forestry companies, finds itself in the crosshairs of the U.S. over softwood lumber. Last month, it was hit with a 19.88 per cent preliminary duty on softwood shipments to the U.S.
Founded in 1972, Tembec produces lumber, paper, pulp and specialty cellulose pulp. It has about 3,000 employees.
Rayonier Advanced Materials is a supplier of high purity cellulose, used in cellphones, computer screens, filters, textiles and pharmaceuticals. It has plants in Florida and Georgia.
"By joining forces, we are diversifying our product offering in high purity cellulose and expanding into the adjacent packaging and forest products markets with significant scale," said Paul Boynton, the chairman, president and CEO of Rayonier Advanced Materials.
Shares in Rayonier Advanced Materials were up 11.4 per cent to US$14.75 on the New York Stock Exchange in morning trading Thursday.
The proposed takeover has the unanimous approval of each company's board of directors. It requires approvals from courts, regulators and shareholders and is expected to close in the second half of 2017.
