TEMISCAMING, QC, April 19 /CNW Telbec/ - Tembec today announced that its European subsidiary, Tembec SAS has signed a share purchase agreement with Paper Excellence B.V for the acquisition of 100% of the shares of Tembec Saint-Gaudens SAS and Tembec Tarascon SAS, two subsidiaries of Tembec SAS. Paper Excellence B.V. will pay 66 million Euros for the shares, as well as assume 34 million Euros of debt of the two European subsidiaries. Total consideration will be approximately 100 million Euros (C $137 million), subject to closing working capital adjustments. While completion of the transaction remains subject to certain conditions being fulfilled by both parties, closing is expected to occur in early May 2010.
"This transaction is consistent with the Company's strategic plan and represents fair value for these assets," reiterated James Lopez, President and CEO of Tembec. "It represents an important step in our efforts to refocus the Company to establish superior returns for our shareholders."
As a result of the sale, Tembec will record a gain of approximately C $23 million in its financial results for the quarter ending June 2010. During the quarter ended December 2009, the mills and related entities had C $73 million of sales and generated C $2 million of EBITDA. In fiscal 2009, the mills and related entities had sales of C $272 million and generated negative EBITDA of C $48 million.
Tembec is a large, diversified and integrated forest products company which stands as the global leader in sustainable forest management practices. The Company's principal operations are located in Canada and France. Tembec's common shares are listed on the Toronto Stock Exchange under the symbol TMB and warrants under TMB.WT. Additional information on Tembec is available on its website at www.tembec.com.
This press release includes "forward-looking statements" within the meaning of securities laws. Such statements relate to the Company's or management's objectives, projections, estimates, expectations or predictions of the future and can be identified by words such as "will", "anticipate", "estimate", "expect" and "project" or variations of such words. These statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of future developments. Such statements are subject to a number of risks and uncertainties, including, but not limited to, changes in foreign exchange rates, product selling prices, raw material and operating costs and other factors identified in our periodic filings with securities regulatory authorities. Many of these risks are beyond the control of the Company and, therefore, may cause actual actions or results to materially differ from those expressed or implied herein. The Company disclaims any intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable securities legislation.
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