(Courtesy of the Jacksonville Daily Record) – Rayonier Advanced Materials Inc. more than doubled in size and briefly entered the Fortune 1000 in 2019 after acquiring Montreal-based Tembec Inc. in late 2017.
However, the Jacksonville-based company is getting smaller as it sheds some of the Canadian operations acquired from Tembec to focus on its core cellulose specialties products.
Rayonier AM announced a deal April 12 to sell six lumber mills and one newsprint mill in Canada to Vancouver-based GreenFirst Forest Products Inc. for $214 million.
That deal follows a 2019 sale of a pulp mill in Quebec to South Africa-based Sappi Ltd. for $175 million.
After acquiring Tembec, Rayonier AM’s revenue jumped from $961 million in 2017 to $2.13 billion in 2018, vaulting the company into 951st place on Fortune magazine’s annual list of the 1,000 largest U.S. companies.
However, the pulp mill sold in 2019 produced $177 million of those sales.
Rayonier AM sales have continued to drop since then, largely because of weakness in its core cellulose specialties market.
The company reported 2020 sales of $1.74 billion, which included $392 million in forest products sales from the six lumber mills being sold to GreenFirst, and $47 million from the newsprint plant included in the deal.
The forest products segment was particularly strong in 2020 because of rising lumber prices, sending sales in the business up 31%.
So, Rayonier AM will continue to shrink in size when the deal is completed later this year, but it is hoping the cash from the sale will help it improve operations.
GreenFirst is paying about 85% of the $214 million sales price in cash and the rest in the company’s stock, which is publicly traded.
“The sale of the lumber and newsprint businesses allows us to divest non-core assets at an attractive valuation and positions Rayonier Advanced Materials to further invest in the earnings growth of our core High Purity Cellulose assets and its biofuture while also reducing overall debt,” CEO Paul Boynton said in a news release.
https://www.jaxdailyrecord.com/article/rayonier-am-shrinking-sales-slipping