Alliance Forest Products Inc. Signs Letter of Intent to Buy U.S.-Based Facilities from Kimberly-Clark.
First U.S. operation of Montreal-based Alliance would double the Company's paper production capacity.
Alliance Forest Products Inc. and Kimberly-Clark signed today a letter of intent for the acquisition by Alliance Forest Products Inc. of Kimberly-Clark's Coosa Pines' facilities, located near Birmingham, Alabama, for approximately US$600 million in cash. The transaction, which is subject to approval by the boards of directors of both companies, completion of financing by Alliance Forest Products Inc., regulatory clearances and other customary conditions, is expected to close during the first quarter of 1997. The companies also agreed to a five-year supply contract under which Kimberly-Clark will purchase a significant portion of the pulp produced at the Coosa Pines mill.
The Coosa Pines facilities include a fully integrated paper mill which produces 334,000 tonnes of newsprint and 89,000 tonnes of groundwood printing paper a year. Its newsprint contains 40 percent recycled fibre which is produced at the mill's deinking facility. In addition to fulfilling its internal pulp requirements, the Coosa Pines mill produces and markets 222,500 tonnes of fluff pulp and 53,000 tonnes of Southern Bleached Hardwood Kraft pulp (SBHK). The facilities also include 146,000 hectares of timberland and a sawmill with a production capacity of 51 million fbm(1). The Coosa Pines mill employs approximately 1,400 people.
"This acquisition will be accretive to our shareholders. It fits very well in our growth strategy and represents an excellent strategic opportunity for Alliance Forest Products Inc.," said Pierre Monahan, President and Chief Executive Officer.
"Aside from significant timberland holdings and complementary product lines, Coosa Pines provides Alliance with an attractive Southern U.S. mill, a significant increase in capacity and an expanded production network from which we can service a larger client base. The Coosa Pines facilities are well-maintained, as they were modernized over the years. They also comply with current environmental regulations."
"The acquisition will be funded through a combination of debt and equity. On a combined basis, Alliance's sales will increase to about C$1 billion" said Dino Fuoco, Senior Vice-President and Chief Financial Officer of Alliance Forest Products Inc.
In Quebec, Alliance Forest Products Inc. has timber-cutting rights to some 2 million m3 and access to nearly 2.5 million m3 in total. Its current production capacities include 335,000 tonnes of newsprint and uncoated groundwood papers in its two paper mills, and 500 million fbm of lumber in its seven sawmills. It also operates a wood-treatment facility and a I-joist plant. About 80 percent of its paper sales and 60 percent of the lumber sales are in the United States. Alliance Forest Products Inc. has a sales office in Stamford, Connecticut. The Company currently employs some 2,000 people in Quebec and New Brunswick.
A Fortune 100 Company, Kimberly-Clark is a leading global manufacturer of personal care, consumer tissue, and away-from-home products. The company's worldwide brands include Huggies, Pull- Ups, Kotex, Depend, Kleenex, Scott, Scottex, Andrex, Popee, Kimwipes, and Wypall. Kimberly-Clark also is a major producer of professional health care products and premium business, correspondence and technical papers. The company has manufacturing operations in 36 countries and sells its products in more than 150 countries.
Alliance Forest Products Inc. is an integrated company specializing in timber harvesting and forest management, as well as in the production and sale of newsprint, uncoated groundwood papers, lumber and related products. The common shares of Alliance Forest Products Inc. are listed on the Montreal Exchange and The Toronto Stock Exchange under the symbol ALP.
(1) fbm: one foot board measure corresponds to one square foot of lumber one inch thick.
CONTACT: Alliance Forest Products Inc.
Dino Fuoco, 514/ 954-2118
|Printer friendly Cite/link Email Feedback|
|Date:||Dec 16, 1996|
|Previous Article:||Benchmarq short-form catalog describes Battery Management ICs, development/evaluation boards, and modules.|
|Next Article:||BC Sugar - Mr. R. Stuart Angus appointed Chairman of the Board - December 12th, 1996.|