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SAPPI LIMITED - Proposed acquisition by Sappi of Matane mill from the Rayonier Advanced Materials Group

Release Date: 01/08/2019 09:01
Code(s): SAP     PDF:  
 
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Proposed acquisition by Sappi of Matane mill from the Rayonier Advanced Materials Group

Sappi Limited                                                                       
(Incorporated in the Republic of South Africa)
Registration number: 1936/008963/06
JSE share code: SAP
ISIN code: ZAE000006284
("Sappi" or the "Company")


Proposed acquisition by Sappi of Matane mill from the Rayonier Advanced Materials
Group

Sappi Limited wishes to announce that its wholly-owned subsidiary Sappi Canada
Enterprises Inc has signed an agreement to acquire the Matane high yield hardwood pulp
mill in Quebec, Canada from Rayonier Advanced Materials Inc (“RYAM”) at a price of
US$175 million. The mill has a capacity of 270 000 tons per annum of high yield hardwood
pulp.

This transaction represents an opportunity to increase Sappi’s pulp integration for both its
North American and European packaging businesses. The increased pulp integration will
lower Sappi’s costs of pulp, reduce the volatility of earnings throughout the pulp cycle and
provide certainty of supply.

The transaction agreements for the acquisition of the Matane mill was concluded on 31 July
2019 and is subject to certain customary conditions precedent, including the pre-requisite
approvals of certain anti-trust authorities. The deal is expected to be concluded in the fourth
calendar quarter of 2019. Sappi will fund the acquisition through internal cash resources and
available debt facilities.

The acquisition is a Category 2 transaction in terms of the JSE Listings Requirements. In this
regard the audited operating profit attributable to the Matane mill as at 31 December 2018
was US$50 million calculated in accordance to US GAAP and the value of the net assets that
are the subject of the transaction is US$170 million inclusive of approximately US$5 million
unfunded pension liabilities.

A detailed presentation on the acquisition is available on the Sappi website www.sappi.com


Johannesburg
01 August 2019


Sponsor : UBS South Africa (Pty) Ltd

Date: 01/08/2019 09:01:00
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