GreenFirst to Acquire Forest and Paper Products Assets in Ontario and Québec with expectation to become top-ten lumber producer in Canada and Announces proposed Debt and Equity Financings

Transaction establishes a strong foundation for GreenFirst’s strategy to invest in pure-play lumber and forest products opportunities in North America

VANCOUVER, BC, April 12, 2021 – GreenFirst Forest Products Inc. (TSXV: GFP) (“GreenFirst”) is pleased to announce that it has entered into a binding asset purchase agreement (the “Agreement”) dated April 10, 2021 pursuant to which a wholly-owned subsidiary of GreenFirst (the “Purchaser”) has agreed to acquire a portfolio of forest and paper product assets (the “Purchased Assets”) from Rayonier A.M. Canada G.P. and Rayonier A.M. Canada Industries Inc. (collectively, “RYAM”), each a subsidiary of Rayonier Advanced Materials Inc. (NYSE: RYAM), which is arm’s length to GreenFirst. The Purchaser is acquiring the Purchased Assets for a purchase price of US$140 million plus the value of the inventory on-hand at the time of closing, reflecting an aggregate purchase price expected to be approximately US$214 million (the “Purchase Price”) which is payable approximately 85% in cash and approximately 15% in common shares in the capital of GreenFirst (each a “Common Share”). In addition, a chip offset credit note will be issued to RYAM by the Purchaser, in the amount of C$7.9 million which may be set off against amounts owing to GreenFirst for chip purchases equally over the next five years (the “Set-off Note”).

In connection with the entering into of the Agreement with RYAM and to satisfy a portion of the Purchase Price, GreenFirst intends to conduct a Rights Offering (as defined below) for gross proceeds of at least US$75 million, which will be backstopped by a commitment from Senvest Management, LLC (including its related parties, “Senvest”), and has entered into a commitment with a New York-based investment fund in respect of a US$120 million senior secured term credit facility. Senvest, together with the investment fund have also committed to make available to the Purchaser a senior secured asset-based revolving credit facility in the amount of US$20 million.

Strategic Rationale

The Purchased Assets include six lumber mills which are located in Chapleau, Cochrane, Hearst and Kapuskasing in Ontario and in Béarn and La Sarre in Québec as well as one newsprint mill located in Kapuskasing, Ontario. The Purchased Assets have an annual production capacity of 755 MMFbm and are capable of producing a wide range of forest products used in residential and commercial construction, including SPF lumber, wood chips and by-products. The newsprint mill has an annual production capacity of 205,000 MT/year. Collectively, the Purchased Assets rank as a top ten producer of lumber in Canada, based on recent publicly available industry rankings.

Management of GreenFirst believes that the proposed transaction will enhance shareholder value due to a perceived attractive Purchase Price for the Purchased Assets and the expected opportunities to generate significant operational efficiencies by optimizing the operations and making capital investments in the mills from operating cash flows. The transaction is also expected to benefit GreenFirst’s shareholders for the following reasons:

  • Growth Opportunities: GreenFirst believes that there are actionable growth opportunities that can be harnessed by investing in the Purchased Assets and optimizing mill performance to reduce cash production costs and potentially increase lumber capacity.
  • Fiber Supply: GreenFirst will have rights to access approximately 3.29 million m3 of guaranteed fiber supply across Ontario and Québec as part of the Purchased Assets. This represents sufficient fiber supply for all of the mills being acquired.
  • Secure Chip Demand: GreenFirst will be entering into a 20 year chip supply agreement (the “Chip Purchase Agreement”) with RYAM on Closing and will also be acquiring established chip supply agreements as part of the Purchased Assets which will provide steady support and demand for the chips produced by the lumber operations. The Chip Purchase Agreement covers approximately 60% of the Purchased Assets’ 2020 chip production, with the remainder to substantially be used by GreenFirst internally.
  • Attractive Purchase Price: The Purchase Price represents an opportunity for GreenFirst to acquire the Purchased Assets at an attractive price at a 3.4x multiple of 2020 adjusted EBITDA and a purchase multiple of US$185/MMfbm.
  • Favourable Industry Dynamics: GreenFirst believes that the growth in the construction industry, forecasted U.S. housing starts and a changing Canadian cost-curve are factors that are favourable to the lumber industry in Ontario and Qué
  • Experienced Operational Management Team: The GreenFirst management team has extensive lumber and forestry experience. The acquired operations will be led by Rick Doman, one of GreenFirst’s newly appointed directors and an industry veteran with over 40 years of experience in the lumber industry, who was the Founder and previously the President and CEO of Eacom Timber.

Management Commentary

With its experienced management team in place, GreenFirst believes that this acquisition will substantially increase its footprint in the lumber industry following its investment in the sawmill in Kenora, Ontario.

Larry Swets, Chief Executive Officer of GreenFirst, commented that “This acquisition represents a significant advancement on our plans to focus GreenFirst on lumber and forestry investments. The acquisition significantly increases our footprint in Ontario and Québec, making us one of the largest companies in the North East focused in this space. We believe this acquisition to be accretive, providing significant value to our business.”

Kyle Cerminara, Chairman of GreenFirst, commented that “The combination of transactions that we have put together over the last 12 months is a homerun for shareholders of GreenFirst. We could not be more pleased with this transaction and we are excited about the highly focused future for this secular investment story.”

Paul Rivett, Director and incoming Chairman of GreenFirst, commented that “GreenFirst is looking forward to extending a warm welcome to RYAM’s employees later this year and to building on RYAM’s established relationships with its lumber and newsprint customers. We are very excited to be working with a great investor base, including most prominently Senvest Management, to build a world-class forest products company focussed primarily on environmentally sustainable lumber production and forest management.”

Rick Doman, Director and incoming Chief Executive Officer of GreenFirst, commented that “As we have done previously with Eacom on the carve-out of sawmill assets of Domtar, our experienced team looks forward to working with the dedicated employees of RYAM to optimize the sawmill assets with a singular focus on maximizing lumber production.”

Asset Purchase Agreement

The Purchaser will acquire the Purchased Assets from RYAM upon the closing of the transactions contemplated in the Agreement (the “Closing”). The Purchased Assets include the lumber and newsprint mills as well as certain real property, machinery, inventory, permits, licenses and other related assets.

The Purchase Price will be paid through a combination of cash, Common Shares (the “Consideration Shares”) and the issuance of the Set-off Note. GreenFirst will issue to RYAM such number of Consideration Shares as are equal (on an as converted basis) to 14.9% of the Purchase Price provided that the number of Consideration Shares will be reduced in the event RYAM would acquire more than 19.9% of the issued and outstanding Common Shares immediately after the transactions described herein. It is currently anticipated that following the Closing, RYAM will hold approximately 16.9% of the issued and outstanding Common Shares of GreenFirst, assuming the Rights Offering is fully subscribed. Each Consideration Share will be subject to a four month hold period in accordance with applicable Canadian securities laws. RYAM has agreed not to sell its Consideration Shares for a period of six months following Closing.

The Set-off Note will be issued by the Purchaser to RYAM at Closing, is non-interest bearing and will have a principal amount of C$7,900,000. The principal amount is payable in five equal annual installments on the anniversary of the Closing and the Purchaser may elect to set-off the principal amount of the Set-off Note against amounts owing by RYAM to the Purchaser under the Chip Purchase Agreement.

The obligations of the parties to the Agreement to complete the transactions set out therein are subject to customary conditions for a transaction of this nature, including: the accuracy of representations and warranties; the fulfilment of certain covenants of the parties; the receipt of certain regulatory approvals, such as anti-trust / competition approvals, the transfer of forestry licenses and the approval of the TSX Venture Exchange (the “TSXV”); the receipt of consents of certain third parties; and there having been no material adverse effect in the operations of RYAM as of the time of Closing.

The transaction will be considered a “Fundamental Acquisition” and a “Reviewable Transaction” under the policies of the TSXV. Accordingly, Closing is subject to the approval of the TSXV. It is anticipated that the TSXV will halt trading in GreenFirst’s Common Shares until such time as the TSXV has determined that the transaction will be acceptable based upon GreenFirst’s filing of all required documentation. The policies of the TSXV provide that the halt will be brief and lifted following the TSXV’s review of the requested documents. GreenFirst expects to deliver to the TSXV all the required documents in the coming days. Closing is not subject to shareholder approval of RYAM, GreenFirst or the Purchaser.

It is currently expected that, subject to the receipt of all regulatory and other approvals, and the satisfaction or waiver of all conditions, Closing will occur in the second half of 2021.

Further details regarding the terms of the transaction are set out in the Agreement, which will be publicly filed by GreenFirst under its profile at 

Financing Summary

In order to finance the cash portion of the Purchase Price, and to fund ongoing working capital and anticipated capital expenditures required in connection with the Purchased Assets, GreenFirst and the Purchaser intend to complete the equity and debt financings described below.

GreenFirst intends to file a prospectus to conduct a backstopped rights offering to finance a portion of the Purchase Price (the “Rights Offering”). GreenFirst intends to issue three rights (each a “Right”) for each of its outstanding Common Shares with each Right being exercisable, at a subscription price of C$1.50 (the “Exercise Price”) to acquire a subscription receipt (each a “Subscription Receipt”). Each Subscription Receipt will, upon Closing and without any further consideration, automatically be exchanged into a Common Share. Senvest has, pursuant to a binding commitment, agreed to purchase, at the Exercise Price, all Subscription Receipts that are not otherwise subscribed for under the Rights Offering such that at least US$75 million of Subscription Receipts are issued. Certain directors and officers of GreenFirst have agreed with Senvest that they will not exercise all or a portion of their Rights or will transfer their Rights to Senvest in the event the backstop commitment amount is less than US$50 million to ensure that Senvest will hold a minimum of US$50 million in GreenFirst following completion of the Rights Offering. In consideration for providing the backstop commitment, Senvest will be granted warrants to acquire Common Shares equal to US$18,750,000 at an exercise price equal to the lower of C$3.18 and such other price as may be consented to by the TSXV and given customary nomination rights in respect of one independent director and customary registration rights for so long as Senvest holds at least 15% of the issued and outstanding Common Shares. The backstop commitment is subject to customary terms and conditions, which will be detailed in a formal backstop commitment agreement. Insiders of GreenFirst and their families have likewise committed, either directly or indirectly, to exercising at least US$4 million of Rights or other already outstanding convertible or exercisable securities of GreenFirst and have agreed not to sell or transfer their Common Shares for a period of six months following Closing other than under customary exceptions.

If the Rights are exercised in full, the gross proceeds to GreenFirst from the Rights Offering are expected to be approximately C$148 million and, as a result of the backstop commitment, the minimum gross proceeds to GreenFirst will be US$75 million. GreenFirst expects to file a long form prospectus in each of the provinces and territories of Canada to qualify the distribution of the Rights and the securities underlying the Rights. Additional details concerning the Rights Offering will be contained in the prospectus once filed. The commencement of the Rights Offering is subject to approval by the TSXV and the applicable securities regulatory authorities. The proceeds of the Rights Offering are expected to be used to finance a portion of the Purchase Price payable in respect of the acquisition of the Purchased Assets and for other general corporate purposes.

The Purchaser has also entered into a Commitment Letter with a New York-based investment fund, on behalf of itself and certain of its affiliates and funds managed, advised or sub-advised by it (the “Lenders”) pursuant to which the Lenders, have committed to make available to the Purchaser a US$120 million senior secured term credit facility, conditional on the fulfilment of certain customary conditions (the “Debt Financing”). Completion of the Debt Financing is subject to certain conditions including, but not limited to, the completion of an equity financing, which is intended to be satisfied by the Rights Offering. The Purchaser has also entered into a backstop commitment letter with the Lenders and Senvest, on behalf of itself and certain of its affiliates and funds managed, advised or sub-advised by it, collectively as lenders, pursuant to which such lenders have committed to make available to the Purchaser a senior secured asset-based revolving credit facility, in an amount of US$20 million. The Purchaser intends to seek a replacement financing commitment in respect of a larger asset-based revolving credit facility before Closing and has engaged Royal Bank of Canada in this respect. The asset-based revolving credit facility is not intended to be used to finance the payment of any of the Purchase Price due on Closing.

Management Changes

Following the entering into of the Agreement, certain board and management changes are expected to take place to reflect GreenFirst’s focus on the lumber industry. It is expected that Rick Doman will replace Larry Swets as the Chief Executive Officer of GreenFirst and that Paul Rivett will replace Kyle Cerminara as the Chairman of the board of directors of GreenFirst. Both Larry Swets and Kyle Cerminara are expected to continue as board members. Rick Doman is a seasoned lumber executive with over 45 years of industry experience.

Investor Call

GreenFirst will host a virtual investor and analyst event hosted by management of GreenFirst on Monday, April 12, 2021 at 4:30 pm EST. In order to participate, please use the conference call details set out below:

Toll-free dial-in number (Canada/US):    1-800-898-3989
Local dial-in number:     416-406-0743
International dial-in numbers:
Participant passcode:  8464876#

A replay of the event will be available on GreenFirst’s website. A presentation providing an overview of the transaction, the strategic rationale for acquiring the Purchased Assets and GreenFirst’s financing plan is available here:


Norton Rose Fulbright Canada LLP is acting as legal counsel to GreenFirst, RBC Capital Markets is acting as financial advisor to GreenFirst, NordStar Capital acted as transaction advisor to GreenFirst and KPMG Transaction Services provided due diligence assistance to GreenFirst. McCarthy Tétrault LLP is acting as legal counsel to RYAM and BoA Securities is acting as financial advisor to RYAM. Goodmans LLP is acting as legal counsel to Senvest and Wilkie Farr & Gallagher LLP is acting as legal counsel to the New York-based investment fund.

About GreenFirst

GreenFirst is a forest-first business, focused on environmentally sustainable forest management and lumber production. We believe that sustainable forest planting and harvesting, coupled with the long-term green advantage of lumber, provide GreenFirst with significant cyclical and secular advantages in building products. GreenFirst’s long-term pursuit is to be a global leader in environmentally sustainable lumber. For more information, please visit:

Forward Looking Information

Certain statements in this press release and in GreenFirst’s oral and written public communications may constitute forward-looking statements that reflect management’s expectations regarding GreenFirst’s future growth, financial performance and business prospects and opportunities, including in respect of the proposed transaction, as of the date of this press release. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “anticipate”, “believe”, “plan”, “forecast”, “expect”, “estimate”, “predict”, “intend”, “would”, “could”, “if”, “may” and similar expressions.

This press release includes, among others, forward-looking statements regarding GreenFirst’s expectations regarding: the anticipated benefits of and strategic rationale for the transaction; the impact of the transaction on GreenFirst and its business; the expected operational efficiencies to be gained from GreenFirst making capital expenditures in the Purchased Assets; the anticipated timing and receipt of required regulatory approvals; the anticipated timing for Closing the transaction; the nature, size and sources of financing available to GreenFirst; the timing, details and pricing of the Rights Offering; the replacement credit facility; the duration of the halt of the Common Shares; timing for the satisfaction of closing conditions under the Agreement; the timing of the board and management changes; and the expected date of the Closing. All such statements are made pursuant to the “safe harbour” provisions of applicable Canadian securities legislation. These statements reflect current expectations of management regarding future events and operating performance, and speak only as of the date of this press release. In addition, forward-looking statements are provided for the purpose of providing information about management’s current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.

By their nature, forward-looking statements require management to make assumptions and are subject to inherent risks and uncertainties. There is a significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that management’s assumptions may not be accurate and that actual results, performance or achievements may differ significantly from such predictions, forecasts, conclusions or projections expressed or implied by such forward-looking statements. We caution readers not to place undue reliance on the forward-looking statements in this press release as a number of factors could cause actual future results, conditions, actions or events to differ materially from the targets, outlooks, expectations, goals, estimates or intentions expressed in the forward-looking statements.

These factors include, but are not limited to: general global economic, market and business conditions; governmental and regulatory requirements and actions by governmental authorities; relationships with employees, customers, business partners and competitors; and diversion of management time on the transaction. There are also risks that are inherent in the nature of the transaction, including failure to satisfy the conditions to the completion of the transaction and failure to obtain any required regulatory and other approvals (or to do so in a timely manner). The anticipated timeline for Closing of the transaction may change for a number of reasons, including the inability to secure necessary regulatory or other approvals in the time assumed or the need for additional time to satisfy the conditions to the Closing of the transaction. As a result of the foregoing, readers should not place undue reliance on the forward-looking information contained in this news release concerning the timing of the transaction.

GreenFirst cautions that the foregoing list is not exhaustive of all possible factors, as other factors could adversely affect our results. When relying on our forward-looking statements to make decisions with respect to GreenFirst and its securities, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. GreenFirst does not intend, and disclaims any obligation, to update any forward-looking statements, whether written or oral, or whether as a result of new information or otherwise, except as may be required by law.

For further information, please contact: Jonathan Lowenstein,, 647-969-3536.

Neither TSXV nor its Regulation Services Provider (as that term is defined in policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.