Acadian Timber Corp. (“Acadian” or the “Company”) (TSX: ADN) today
announced that it has entered into an agreement with its external
manager, Brookfield Timberlands Management LP (“Brookfield LP”), a
subsidiary of Brookfield Asset Management (“BAM”), to terminate the
asset management agreement (the “Management Agreement”) between
Acadian and Brookfield LP and internalize Acadian’s asset
management and administrative services functions (the
“Internalization”).
As a result of the Internalization, the annual
base management fee, the annual performance fee and any other fees
payable by the Company to Brookfield LP will be eliminated
effective immediately. The aggregate consideration payable to
Brookfield LP in connection with the Internalization is $18
million, which will be satisfied in cash. In addition, the
exclusivity agreement between BAM and a subsidiary of Acadian has
been terminated.
Strategic Rationale
Acadian’s board of directors (the “Board”)
undertook an extensive evaluation of the merits of the
Internalization and has unanimously determined that it is in the
best interest of Acadian to fully internalize Acadian’s asset
management and administrative services functions. In evaluating the
Internalization, the Board considered a number of factors, which
included:
- The elimination of the asset management fee and the annual
performance fee will reduce Acadian’s corporate costs and, in turn,
increase free cash flow;
- The Internalization is immediately accretive to Acadian’s free
cash flow per common share by approximately 5%;
- Acadian will continue to benefit from the expertise, platform
and industry relationships of certain BAM employees who will
continue on with Acadian under a more efficient cost structure;
and
- The capital markets' preference for internal management and
more simplified management structures.
“We believe that the internalized management
structure will be more efficient and that it is better aligned with
Acadian’s strategy to be a leading primary forest products company
in New Brunswick and Maine,” said Malcolm Cockwell, Chairman of the
Board. “The Internalization is expected to surface value
immediately with minimal impact to Acadian’s operations.”
Internal Asset Management
Team
In connection with the Internalization, BAM
representatives Mark Bishop and Matthew Gross have each resigned
from their positions as Chief Executive Officer and Chief Financial
Officer of Acadian, respectively, effective immediately.
“Since Acadian’s inception, Brookfield LP has
established a successful track record of managing the Company,”
said Mr. Cockwell. “The entire management team and Board would like
to thank Mr. Bishop and Mr. Gross for their hard work, dedication
and significant contributions to Acadian.”
Erika Reilly, former Chief Financial Officer of
Acadian and current Senior Vice President of BAM has been seconded
as interim President and Chief Executive Officer of Acadian. Brian
Banfill, also a former Chief Financial Officer of Acadian, has
assumed the role of interim Chief Financial Officer.
Transition Services
Agreement
In connection with the Internalization, Acadian
has entered into a transition services agreement with BAM (the
“Transition Services Agreement”), pursuant to which BAM will
provide certain transition services to Acadian (the “Transition
Services”) for a period of up to 24 months (the “Transition
Period”). The Transition Services will be provided by BAM at no
cost to Acadian. In addition, the Transition Services Agreement
includes exclusivity provisions that are to Acadian’s benefit and
restrict BAM during the Transition Period from owning or managing
timberlands in the jurisdictions in which Acadian operates, subject
to certain limited exceptions.
Acadian Timber Corp. is a
leading supplier of primary forest products in Eastern Canada and
the Northeastern U.S. With a total of 2.4 million acres of land
under management, Acadian is one of the largest timberland
operators in New Brunswick and Maine.
Acadian owns and manages approximately 1.1
million acres of freehold timberlands in New Brunswick and Maine,
and provides timber services relating to approximately 1.3 million
acres of Crown licensed timberlands in New Brunswick. Acadian's
products include softwood and hardwood sawlogs, pulpwood and
biomass by-products, sold to approximately 85 regional
customers.
Acadian’s business strategy is to maximize cash
flows from its existing timberland assets while growing our
business by acquiring assets on a value basis and utilizing our
operations-oriented approach to drive improved
performance.
Acadian’s shares are listed for trading on the
Toronto Stock Exchange under the symbol ADN.
For further information on Acadian, please visit
our website at www.acadiantimber.com or contact:
Brian Banfill Interim Chief Financial
OfficerTel: 604-669-3141 Email: ir@acadiantimber.com
Cautionary Statement Regarding
Forward-Looking Information and Statements
This news release contains forward-looking
information and statements within the meaning of applicable
Canadian securities laws that involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of Acadian, or industry results, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. When used in this news release, such forward-looking
statements may contain such words as “may,” “will,” “intend,”
“should,” “suggest,” “expect,” “believe,” “outlook,” “forecast,”
“predict,” “remain,” “anticipate,” “estimate,” “potential,”
“continue,” “plan,” “could,” “might,” “project,” “targeting” or the
negative of these terms or other similar terminology.
Forward-looking information in this news release includes, without
limitation, statements regarding the expected benefits of the
Internalization and the period for which Transition Services will
be provided. These statements, which reflect management’s
expectations regarding future events are based on information
currently available and speak only as of the date of this news
release. All forward-looking statements in this news release are
qualified by these cautionary statements. Forward-looking
statements involve significant risks and uncertainties, should not
be read as guarantees of future performance or results, should not
be unduly relied upon, and will not necessarily be accurate
indications of whether or not such results will be achieved.
Forward-looking information is based on various
material factors or assumptions, which are based on information
currently available to Acadian. Although the forward-looking
statements contained in this news release are based upon what
Acadian believes are reasonable assumptions, Acadian cannot assure
readers that actual results will be consistent with these
forward-looking statements. Acadian does not assume any obligation
to update or revise these forward-looking statements to reflect new
information, events, circumstances or otherwise, except as may be
required by applicable law.
Acadian Timber (TSX:ADN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Acadian Timber (TSX:ADN)
Historical Stock Chart
From Jul 2023 to Jul 2024