Quebec lumber giant in $807M takeover bid

MONTREAL — 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 $807 million US, including assumed debt.

The merged entity would keep a Canadian headquarters in Montreal, with the main corporate office in Jacksonville, Florida, 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 are being offered $4.05 Cdn 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 TSX.

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.

The proposed takeover has the unanimous approval of each company’s board of directors. It requires approvals from courts, regulators and shareholders.