PaperAge Magazine

Rayonier Advanced Materials and Tembec Announce Increase in Consideration under Amended Arrangement Agreement

Rayonier Advanced Materials and Tembec The increased consideration represents a 17% increase in value offered for the shares compared to the initial terms and a premium of 61% to the closing price of Tembec's shares on May 24, 2017.
  • Increased Consideration Valued at C$4.75
  • Oaktree and Bennett Management Agree to Vote in Favor of the Arrangement
  • Tembec shareholders should submit or update their proxies or voting instructions in advance of the meeting without delay

July 23, 2017 - Rayonier Advanced Materials Inc. ("Rayonier Advanced Materials") (NYSE: RYAM) and Tembec Inc. ("Tembec") (TSX: TMB) today announced that they have entered into an amendment to the arrangement agreement (as amended, the "Amended Arrangement Agreement") under which Rayonier Advanced Materials has agreed to acquire Tembec (the "Arrangement") for an increased consideration valued at C$4.75 per Tembec share. The revised terms were unanimously approved by the boards of directors of both companies.

Under the Amended Arrangement Agreement, Tembec shareholders will have the right to elect to receive either C$4.75 in cash or 0.2542 shares of Rayonier Advanced Materials common stock per Tembec common share, subject to proration so that approximately 67% of the aggregate consideration is paid in cash and approximately 33% is paid in Rayonier Advanced Materials common stock.

The increased consideration represents a 17% increase in value offered for the shares compared to the initial terms and a premium of 61% to the closing price of Tembec's shares on May 24, 2017, the day immediately before the initial announcement concerning the Arrangement.

Rayonier Advanced Materials has entered into irrevocable support and voting agreements with each of Oaktree Capital Management L.P. and Restructuring Capital Associates L.P., who together represent approximately 37% of Tembec's outstanding shares, pursuant to which they have agreed to vote in favor of the Arrangement.

Stronger, More Diversified Global Leader

"This transaction advances our growth objective to pursue strategic acquisitions where we can leverage our core competencies to provide significant long-term shareholder return," said Paul Boynton, Chairman, President and Chief Executive Officer of Rayonier Advanced Materials. "We look forward to working with Tembec's exceptional team, unions and other stakeholders to realize the abundant opportunities ahead."

James Lopez, President and Chief Executive Officer of Tembec, added, "Rayonier Advanced Materials is the ideal partner for us and we are encouraged by their ongoing commitment to our operations and employees in Canada and France and — above all — to the values we share. This combination will enable us to sustainably grow our business for the benefit of our customers, employees and communities. We are, of course, pleased with the opportunity to deliver even greater value to our shareholders."

Structure, Timing and Approvals of Transaction

The transaction will be carried out by way of a court-approved plan of arrangement and will require the approval of at least 66 2/3% of the votes cast by Tembec shareholders. Rayonier Advanced Materials intends to finance the cash portion of the transaction with a combination of cash on hand and committed bank financing. The transaction does not require the approval of Rayonier Advanced Materials stockholders.

In addition to Tembec shareholder and court approvals, the transaction is also subject to other conditions and receipt of other approvals, including receipt of regulatory approvals. As previously announced on July 13, 2017, the transaction has received approval from Germany's Federal Cartel Office. Subject to obtaining the required approvals, the transaction is expected to be completed in the fourth quarter of 2017.

Tembec is a manufacturer of forest products — lumber, paper, pulp and high purity cellulose — and a global leader in sustainable forest management practices. Principal operations are in Canada and France. Tembec has approximately 3,000 employees and annual sales of approximately C$1.5 billion. To learn more please visit: www.tembec.com.

Rayonier Advanced Materials is a leading global supplier of high purity cellulose, a natural polymer commonly used in applications such as cell phones, computer screens, filters, textiles and pharmaceuticals. Rayonier Advanced Materials' facilities can produce approximately 485,000 tons of high purity cellulose and 245,000 tons of commodity products. With approximately 1,200 employees and revenues of US$870 million, Rayonier Advanced Materials is routinely ranked among the nation's top 50 exporters, shipping products to five continents, 35 countries and 80 ports around the world. To learn more, please visit: www.rayonieram.com.

SOURCE: Rayonier Advanced Materials Inc.