Determined to improve the competitiveness of wood products with the acquisition of I-joist Partner and the acquisition of a strategic cogeneration facility
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MONTREAL, February 14, 2022 /PRNewswire/ – Resolute Forest Products Inc. (NYSE: RFP) (TSX: RFP) today announced two separate transactions aimed at growing and improving the competitiveness of its wood products business.
Today, Resolute entered into an agreement with Louisiana-Pacific Corporation (NYSE: LPX) to acquire the latter’s 50% interest in two joint ventures that produce I-joists in the Lac-Saint-Jean region of Quebec for $50 million, subject to customary adjustments. Resolute-LP Engineered Wood Larouche Inc. and Resolute-LP Engineered Wood St-Prime Limited Partnership are located in Larouche and Saint Prime, respectively, and are equity-accounted investments in which Resolute holds a 50% interest in each entity. Resolute operates the facilities and its joint venture partner, Louisiana– Pacific, sells the products.
“By acquiring the remaining 50% of the I-joist partnership, we are solidifying our presence in the growing and attractive segment of engineered wood products with assets we know well, with a talented workforce and dedicated team of more than 175 people,” noted Rémi G. Lalonde, President and CEO. “In addition to locking in the downstream integration of over 60 million board feet of sawmilling capacity, the transaction allows us to consolidate the full value of the EBITDA it generates, 50% of which was previously included in other income. I would like to highlight our fruitful partnership with Louisiana-Pacific that spans several decades, one that we amicably disband as we each pursue opportunities to create value for our respective businesses.”
Resolute will enter into agreements with Louisiana-Pacific will continue to serve as the exclusive distributor of engineered wood products manufactured at both operations.
In a separate transaction, Resolute also announced an agreement signed on February 11th with Boralex (TSX: BLX) for the purchase of a cogeneration plant at Senneterre, Quebec.
“The purchase of the 34.5 megawatt cogeneration plant, adjacent to our Senneterre sawmill, builds on our significant investments in the region, including the ongoing project towards a new planer and related equipment that we announced last summer, as well as recently completed operational improvements at our Comtois sawmill . With this cogen, we will maximize the use of biomass from our regional operations, generating green energy and providing a platform for future growth and increased competitiveness for the Abitibi-Témiscamingue region. We are pleased to welcome the more than 30 employees of the cogeneration plant at Resolute“, added Mr. Lalonde.
The acquisitions, subject to regulatory approvals and certain closing conditions, are expected to close in the first half of 2022.
Resolute intends to pay for purchases with cash on hand.
Cautions Regarding Forward-Looking Information
Statements contained in this press release that are not stated financial results or other historical information of Resolute Forest Products Inc. (“Resolved” Where “we“) are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, the statements included in this press release and statements relating to the satisfaction or waiver of conditions to closing transactions proposed, the expected timetable for the closing of the contemplated transactions, the proposed method of financing the contemplated acquisitions, the distribution agreements contemplated with Louisiana-Pacific, and the benefits and impact of the proposed transactions on our business, financial condition and results of operations. Forward-looking statements can be identified by the use of forward-looking words such as the words “should”, “would”, “could”, “will”, “may”, “expect”, “intend to “, “enable”, “solidify”, “grow”, “improve”, “continue”, “maximize”, “build” and other terms with a similar meaning indicating possible future events or a potential impact on the activities of Resolute or its shareholders.
Readers are cautioned not to place undue reliance on these forward-looking statements, which are not guarantees of future performance. These statements are based on management’s current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause actual results to differ materially. Potential risks and uncertainties include, but are not limited to, any delay in receiving required regulatory approvals or satisfaction of other closing conditions, which could adversely impact the completion of the proposed transactions, any required changes to the proposed financing of acquisitions, the risks of not successfully integrating the acquired businesses or assets into Resolute’s operations or not realizing some or all of the anticipated benefits of the proposed transactions, which could adversely affect results operations, financial condition or liquidity of Resolute, as well as those determined pursuant to Part I, Section 1A, “Risk Factors”, of Resolute’s Annual Report on Form 10-K for the fiscal year ended 31 December 2020, filed with the United States Securities and Exchange Commission (or, the “SECOND“) on March 1, 2021, which have been compounded by the COVID-19 pandemic, including governmental responses and related economic impacts, market disruptions and resulting changes in consumer habits.
All forward-looking statements are expressly qualified by the cautionary statements contained or referenced above and in other filings by Resolute with the SEC and Canadian securities regulators. Resolute disclaims any obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law.
About Resolute Forest Products
Resolute Forest Products is a global leader in the forest products industry with a diverse line of products, including market pulp, tissue papers, wood products and papers, which are marketed in more than 60 countries. The company owns or operates approximately 40 facilities, as well as power generation assets, in United States and Canada. Resolute has 100% of its managed woodlands third-party certified to internationally recognized sustainable forest management standards. Shares of Resolute Forest Products trade under the ticker symbol RFP on the New York Stock Exchange and the Toronto Stock Exchange.
Resolute has received regional, North American and global recognition for its leadership in corporate social responsibility and sustainability, as well as its business practices. Visit www.resolutefp.com for more information.
SOURCE Resolute Forest Products Inc.