- 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
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.
Voting Information
Tembec shareholders are reminded that the special meeting of
Tembec shareholders (the “Meeting”) will be held at 10:00 a.m.
(Eastern Time) on Thursday, July 27, 2017 and that proxies must be
received by Tembec's transfer agent, Computershare, no later than
5:00 p.m. (Eastern Time) on Tuesday, July 25, 2017. Tembec
shareholders holding their shares through a broker, investment
dealer or other intermediary should carefully follow the
instructions of such intermediary to ensure that their vote is
counted at the meeting. Tembec may waive the time limits for the
deposit of proxies if considered advisable to do so.
Tembec shareholders are entitled to vote at the Meeting if they
were a holder of Tembec shares at the close of business on June 19,
2017. Your vote is important regardless of the number of shares you
hold and the Tembec board of directors urges you to vote.
If you have already submitted your proxy or voting instructions
and you do not wish to change your votes on the matters set forth
therein, no further action is required on your part and your votes
will be counted at the Meeting in accordance with the proxy or
voting instructions you have already submitted. If you have already
submitted your proxy or voting instructions and you wish to change
your vote, you must comply with the proxy revocation procedures set
forth in the management information circular mailed to Tembec
shareholders on June 23, 2017 and made available under Tembec’s
profile on SEDAR at www.sedar.com. Tembec shareholders holding
their shares through a broker, investment dealer or other
intermediary should contact such intermediary without delay if they
wish to change their voting instructions.
Tembec shareholders who require assistance in submitting their
proxies or voting instructions may direct their inquiries to
Tembec’s proxy solicitation agent, Shorecrest Group, by telephone
at 1-888-637-5789 toll-free in North America or by e-mail at
contact@shorecrestgroup.com. For banks, brokers and collect calls
outside North America, please call 1-647-931-7454.
Fairness Opinions
Tembec has obtained fairness opinions from each of Scotia
Capital and National Bank Financial that, as of July 23, 2017,
subject to the assumptions, limitations and qualifications
contained therein, the consideration to be received by the Tembec
shareholders pursuant to the Amended Arrangement Agreement is fair
to such shareholders from a financial point of view.
Advisors
For Rayonier Advanced Materials, BofA Merrill Lynch is serving
as financial advisor and Wachtell, Lipton, Rosen & Katz,
McCarthy Tétrault LLP and Hogan Lovells US LLP are serving as legal
counsel.
For Tembec, Scotia Capital is serving as financial advisor and
National Bank Financial is serving as financial advisor, on a
non-contingent fixed-fee basis. Stikeman Elliott LLP, Cahill Gordon
& Reindel LLP, Dechert LLP and Slaughter and May are serving as
legal counsel.
About Rayonier Advanced Materials
Rayonier Advanced Materials is a leading global supplier of high
purity cellulose, a natural polymer commonly found in cell phones,
computer screens, filters and pharmaceuticals. The company
engineers dozens of customized products at its plants
in Florida and Georgia, delivering unique
properties, unparalleled consistency and exceptional quality.
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. More information is
available at www.rayonieram.com.
About Tembec
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. Tembec is listed on the Toronto
Stock Exchange (TMB). More information is available at www.tembec.com.
Forward-Looking Statements
This document contains statements that are forward-looking
statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
hereof. All forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ
materially from those projected. Such risks and uncertainties
include, but are not limited to: the timing of the closing of the
Arrangement; whether the Arrangement will be consummated at all and
the ability to obtain required regulatory approvals and satisfy the
other conditions to closing the Arrangement; the expected benefits
of the Arrangement and whether such benefits will be achieved on a
timely basis or at all; the ability of Tembec and Rayonier Advanced
Materials to successfully integrate their respective businesses;
prolonged weakness in general economic conditions; competitive
pressures in the markets in which we operate; customer
concentration; unfavorable weather conditions or natural disasters;
reliance on government permits or approvals; risks related to
federal, state, local and foreign government laws, rules and
regulations; risks related to the reliance on information
technology; manufacturing issues that may arise; adverse
consequences of current or future legal claims; ability to hire and
retain a sufficient seasonal workforce; labor relations with the
unions representing Rayonier Advanced Materials’ hourly employees;
changes in transportation-related costs and availability; risks
related to workforce, including increased labor costs; the failure
to attract and retain key personnel; the failure to innovate to
maintain competitiveness, grow the business and protect
intellectual property; fluctuations in foreign currency exchange
rates; impairments or write downs of assets; changes in accounting
estimates and judgments, accounting principles, policies or
guidelines; the effect of current and future environmental laws and
regulations as well as changes in circumstances on the cost and
estimated future cost of required environmental expenditures;
material adverse changes in financial condition; any failure by
Rayonier Advanced Materials to realize expected benefits from its
separation from Rayonier Inc.; financial obligations under
agreements related to debt; and other risks detailed in Rayonier
Advanced Materials’ filings with the U.S. Securities and Exchange
Commission, including the “Risk Factors” section of Rayonier
Advanced Materials’ Annual Report on Form 10-K for the fiscal year
ended December 31, 2016 and in Tembec’s filings with the Canadian
Securities Administrators, including the “Risk Factors” section of
Tembec’s Annual Information Form for the fiscal year ended
September 24, 2016. All forward-looking statements attributable to
Tembec or Rayonier Advanced Materials or any persons acting on
their behalf are expressly qualified in their entirety by these
cautionary statements. All forward-looking statements in this
document are made as of the date hereof and neither Tembec nor
Rayonier Advanced Materials undertakes any obligation to update any
forward-looking statements whether as a result of new information,
future events or otherwise, except as may be required by law.
Additional Information
Further information regarding the transaction is contained in
the management information circular in connection with the special
meeting of the Tembec shareholders filed by Tembec with the
Canadian Securities Administrators on June 23, 2017 and furnished
by Rayonier Advanced Materials on Form 8-K filed June 23, 2017 with
the U.S. Securities and Exchange Commission. Investors and security
holders are urged to read the information circular, as it contains
important information concerning the proposed transaction.
Investors and security holders may obtain a copy of the arrangement
agreement, information circular and other meeting materials at
www.sec.gov and www.sedar.com. This document is for informational
purposes only. It does not constitute an offer to purchase shares
of Rayonier Advanced Materials or Tembec or a solicitation or
recommendation statement under the rules and regulations of the
Canadian securities regulators, the U.S. Securities and Exchange
Commission or other applicable laws.
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version on businesswire.com: http://www.businesswire.com/news/home/20170723005052/en/
Rayonier Advanced MaterialsMediaRyan Houck,
904-357-9134media@rayonieram.comorInvestorsMickey Walsh,
904-357-9162mickey.walsh@rayonieram.comorTembecMediaLinda
Coates, 416-775-2819linda.coates@tembec.comorInvestorsMichel Dumas,
819-627-4268michel.dumas@tembec.com