Sappi Ltd. Completes $175M Acquisition of Quebec Pulp Mill

SEATTLE (Scrap Monster): Sappi Limited announced that it has concluded previously announced acquisition of Matane hardwood pulp mill in Quebec, Canada from Rayonier Advanced Materials. The company press release noted that it has fulfilled all precedent conditions related to the acquisition and that the closing has been completed successfully. The deal is expected to increase pulp integration for Sappi’s North American business.

The acquisition deal is valued at around $175 million, which was funded using internal cash resources and available debt facilities. $100 million of the proceeds will be used by Rayonier to repay a portion of the company's Senior Secured Credit Facilities. 

ALSO READ: Cascades, Inc. Completes Acquisition of Orchid Paper Products

The addition of Matane pulp mill assets to its fold will help Sappi Limited to boost growth in higher margin growth segments. It is expected to help the company secure supply of high yield pulp to support its recent investments in the country. In addition, it will enable increased supply to mills in North America and Europe in future.

Steve Binnie, Chief Executive officer, Sappi Limited noted that the company is extremely pleased to have finalized the acquisition at a very quick pace. The acquisition will help to reduce costs and volatility, by offering competitive price for pulp. The transaction marks another significant milestone in its journey to achieving Vision2020 goal. Furthermore, it will strengthen the company’s pulp integration and boost profitability, he added.

Matane pulp mill has a production capacity of approximately 270,000 metric tons of high-yielding pulp. It employs nearly 130 people.