Resolute to Improve Competitiveness of Wood Products With Buyout of I-joist Partner and Acquisition of Strategic Cogeneration Facility
MONTRÉAL, Feb. 14, 2022 /CNW Telbec/ - Resolute Forest Products Inc. (NYSE: RFP) (TSX: RFP) today announced two separate transactions to grow and improve the competitiveness of its wood products business.
Today, Resolute reached an agreement with Louisiana-Pacific Corporation (NYSE: LPX) to acquire the latter's 50% equity 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 method investments in which Resolute has a 50% interest in each entity. Resolute operates the facilities and its joint-venture partner, Louisiana-Pacific, sells the products.
"By acquiring the other 50% of the I-joist partnership, we solidify our presence in the growing and attractive engineered wood products segment with assets we know well, staffed with a talented and dedicated workforce of more than 175 people," said Remi G. Lalonde, president and chief executive officer. "In addition to locking in the downstream integration of over 60 million board feet of lumber capacity, the transaction allows us to consolidate the full value of the EBITDA it generates, 50% of which had up to now been included in other income. I would like to acknowledge our successful partnership with Louisiana-Pacific that has spanned several decades, one that we dissolve amicably as we each pursue value-generation opportunities for our respective companies."
Resolute will enter into agreements with Louisiana-Pacific to continue to serve as the exclusive distributor of the engineered wood products manufactured at the two operations.
In a separate transaction, Resolute also announced an agreement signed on February 11 with Boralex (TSX: BLX) for the purchase of a cogeneration facility in Senneterre, Quebec.
"The purchase of the 34.5-megawatt cogeneration facility, adjacent to our Senneterre sawmill, builds on our significant investments in the region, including the ongoing project toward a new planer and associated equipment we announced last summer, as well as operational improvements recently completed at our Comtois sawmill. With this cogen, we will maximize the use of biomass from our regional operations, generating green power and providing a platform for future growth and enhanced competitiveness in the Abitibi-Témiscamingue region. We are pleased to welcome the 30-plus employees of the cogeneration facility to 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 the purchases with cash on hand.
Cautionary Statements Regarding Forward-Looking Information
Statements in this press release that are not reported financial results or other historical information of Resolute Forest Products Inc. ("Resolute" or "we") are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements included in this press release and statements relating to the satisfaction or waiver of closing conditions of the proposed transactions, the expected timetable for closing the proposed transactions, the proposed method of financing the proposed acquisitions, the proposed distributorship agreements with Louisiana-Pacific, and the benefits and impact of the proposed transactions on our business, financial condition and results of operations. Forward-looking statements may be identified by the use of forward-looking terminology such as the words "should," "would," "could," "will," "may," "expect," "intend," "allow," "solidify," "grow," "improve," "continue," "maximize," "build" and other terms with similar meaning indicating possible future events or potential impact on Resolute's business or its shareholders.
The reader is 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. The potential risks and uncertainties include, but are not limited to, any delays in receiving required regulatory approvals or satisfying other closing conditions, which could have a negative impact on the completion of the proposed transactions, any required changes to the proposed funding of the acquisitions, the risks of not successfully integrating the acquired businesses or assets with Resolute's business or not realizing some or all of the anticipated benefits of the proposed transactions, which could adversely affect the Resolute's results of operations, financial condition or liquidity, as well as those set forth under Part I, Item 1A, "Risk Factors," of Resolute's annual report on Form 10-K for the year ended December 31, 2020, filed with the U.S. Securities and Exchange Commission (or, the "SEC") on March 1, 2021, which have been heightened by the COVID-19 pandemic, including related governmental responses and economic impacts, market disruptions and resulting changes in consumer habits.
All forward-looking statements are expressly qualified by the cautionary statements contained or referred above and in Resolute's other filings with the SEC and the Canadian securities regulatory authorities. 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 range of products, including market pulp, tissue, wood products and papers, which are marketed in over 60 countries. The company owns or operates some 40 facilities, as well as power generation assets, in the United States and Canada. Resolute has third-party certified 100% of its managed woodlands to internationally recognized sustainable forest management standards. The shares of Resolute Forest Products trade under the stock symbol RFP on both 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 sustainable development, as well as for its business practices. Visit www.resolutefp.com for more information.
SOURCE Resolute Forest Products Inc.For further information: Contacts: Investors: Marianne Limoges, Treasurer and Vice President, Investor Relations, 514 394-2217, email@example.com; Media and Others: Seth Kursman, Vice President, Corporate Communications, Sustainability and Government Affairs, 514 394-2398, firstname.lastname@example.org