ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On December 23, 2019, Resolute Forest Products Inc. (the Company), through its wholly-owned subsidiary, Resolute FP US Inc. (the
Purchaser), entered into a Securities Purchase Agreement (the Purchase Agreement) pursuant to which the Company agreed to acquire from Conifex USA Inc. and Conifex Holdco LLC (the Vendors),
wholly-owned subsidiaries of Conifex Timber Inc. (TSX: CFF), all of the securities and membership interests (the Purchased Securities) in certain of its subsidiaries, the business of which consists mainly in the operation of three
sawmills and related assets located in Cross City (Florida) and in Glenwood and El Dorado (Arkansas) (the Business).
The purchase price for the Purchased Securities consists of $163 million in cash plus working capital for the Business to be delivered at
closing, and subject to the discharge by the Vendors of all indebtedness before closing. The Company intends to finance the acquisition with existing credit facilities.
The Purchase Agreement contains customary representations and warranties, and closing conditions, including but not limited to, the receipt of
required third-party consents under the Purchase Agreement. Conifex Timber Inc. is guaranteeing all of the obligations of the Vendors in favor of the Purchaser.
The Purchaser and the Vendors have also agreed to comply with covenants during the interim period between the date of the Purchase Agreement
and the closing of the acquisition of the Purchased Securities, which include covenants regarding the pre-closing operation of the Business, notice of certain events, access to information, cooperation between the parties with respect to
certain government filings, publicity, insurance, environmental issues, non-solicitation and exclusivity provisions.
Either party may
terminate the Purchase Agreement if, including, but not limited to, (i) the acquisition has not been consummated by May 29, 2020, (ii) a governmental entity issues an order or takes an action that permanently restrains or otherwise prohibits
the consummation of the transactions contemplated in the Purchase Agreement, or (iii) in the event of certain breaches of representations, warranties, covenants or other agreements by the other party. The Purchaser may also terminate the Purchase
Agreement in the event of certain claims or proceedings that could impede, prevent or delay the consummation of the transaction.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Statements in this current report on Form 8-K that are not reported financial results or
other historical information of the Company and its subsidiaries and affiliates are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements relating to
the expected timetable for closing the sale of the Purchase Securities and the satisfaction or waiver of closing conditions. Forward-looking statements may be identified by the use of forward-looking terminology such as the words
believes, estimates, projects, anticipates, forecast, intend, project, potential, target, should, would,
could, will, may, expect, and other terms with similar meaning indicating possible future events or potential impact on the Companys 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 managements current assumptions, beliefs and expectations, all of which involve a number of business risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties include,
among other things, any delays in receiving required regulatory approvals or satisfying other closing conditions, which could have a negative impact on the completion of the acquisition, or the risks of not successfully integrating the acquired
Business or assets with the Companys business or not realizing some or all of the anticipated synergies and benefits of the acquisition which could adversely affect the Companys results of operations and cash flows. Additional
information regarding factors that may cause actual results to differ materially from these forward-looking statements is available in the Companys filings with the SEC, including the risks and uncertainties identified in Part I, Item 1A
Risk Factors of the Companys Annual Report on 10-K for the year ended December 31, 2018.
All forward-looking statements in this current report on Form 8-K are expressly qualified by
the cautionary statements contained or referred to in this report and in our other filings with the SEC and the Canadian securities regulatory authorities. The Company 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.
All amounts in this current
report on Form 8-K are expressed in U.S. dollars, unless otherwise indicated.