Resolute to Improve Competitiveness of Wood Products With Buyout of I-joist Partner and Acquisition of Strategic Cogeneration Facility
Resolute Forest Products Inc. today announced two separate transactions to grow and improve the competitiveness of its wood products business.
Today, Resolute reached an agreement with Louisiana-Pacific Corporation (NYSE: LPX) to acquire the latter’s 50% equity interest in two joint ventures that produce I-joists in the Lac-Saint-Jean region of Quebec for $50 million, subject to customary adjustments. Resolute-LP Engineered Wood Larouche Inc. and Resolute-LP Engineered Wood St-Prime Limited Partnership are located in Larouche and Saint-Prime, respectively, and are equity method investments in which Resolute has a 50% interest in each entity. Resolute operates the facilities and its joint-venture partner, Louisiana-Pacific, sells the products.
“By acquiring the other 50% of the I-joist partnership, we solidify our presence in the growing and attractive engineered wood products segment with assets we know well, staffed with a talented and dedicated workforce of more than 175 people,” said Remi G. Lalonde, president and chief executive officer. “In addition to locking in the downstream integration of over 60 million board feet of lumber capacity, the transaction allows us to consolidate the full value of the EBITDA it generates, 50% of which had up to now been included in other income. I would like to acknowledge our successful partnership with Louisiana-Pacific that has spanned several decades, one that we dissolve amicably as we each pursue value-generation opportunities for our respective companies.”
Resolute will enter into agreements with Louisiana-Pacific to continue to serve as the exclusive distributor of the engineered wood products manufactured at the two operations.
In a separate transaction, Resolute also announced an agreement signed on February 11 with Boralex (TSX: BLX) for the purchase of a cogeneration facility in Senneterre, Quebec.
“The purchase of the 34.5-megawatt cogeneration facility, adjacent to our Senneterre sawmill, builds on our significant investments in the region, including the ongoing project toward a new planer and associated equipment we announced last summer, as well as operational improvements recently completed at our Comtois sawmill. With this cogen, we will maximize the use of biomass from our regional operations, generating green power and providing a platform for future growth and enhanced competitiveness in the Abitibi-Témiscamingue region. We are pleased to welcome the 30-plus employees of the cogeneration facility to Resolute,” added Mr. Lalonde.
The acquisitions, subject to regulatory approvals and certain closing conditions, are expected to close in the first half of 2022.
Resolute intends to pay for the purchases with cash on hand.
About Resolute Forest Products
Resolute Forest Products is a global leader in the forest products industry with a diverse range of products, including market pulp, tissue, wood products and papers, which are marketed in over 50 countries. The company owns or operates some 40 facilities, as well as power generation assets, in the United States and Canada. Resolute has third-party certified 100% of its managed woodlands to internationally recognized sustainable forest management standards. The shares of Resolute Forest Products trade under the stock symbol RFP on both the New York Stock Exchange and the Toronto Stock Exchange.
Resolute has received regional, North American and global recognition for its leadership in corporate social responsibility and sustainable development, as well as for its business practices. Visit www.resolutefp.com for more information.
Marianne Limoges – Treasurer & Vice President Investor Relations – firstname.lastname@example.org – (514) 394-2214
Source: Resolute Forest Products Inc.