GreenFirst Forest Products Inc., a Vancouver-based company with expertise in restructuring sawmills, saw its stock surge by more than 150 per cent on its first day of trading after announcing a major acquisition. The stock opened at $ 4.29 on Wednesday and closed at $ 8.01.
Trading in the company’s stock was halted on April 12 following the announcement that it would acquire forestry and paper mill assets from Rayonier Advanced Materials Inc., including six softwood lumber mills and a newsprint mill. The mills are located in Ontario and Quebec.
Reacting positively to the stock growth, incoming director and CEO Rick Doman said he will be excited to move forward with the acquisition later this year and transition into his new role.
Doman, who was previously president and CEO of Doman Industries (now Western Forest Products), said he saw potential in the Eastern Canada mills as a result of the impact of the mountain pine beetle on British Columbia’s lumber industry.
“Our goal is to make the (acquired) mills as productive as we can through capital, management practices and increasing production,” he said.
According to a company press release, the new assets were purchased for $ 140 million (U.S.), plus the value of inventory at closing, for an expected total purchase price of $ 214 million. Combined, the mills employ roughly 1,500 people. The deal is expected to close by July 31.
In addition to the most recent acquisition, the company also acquired assets in Kenora, Ont., in October 2020, and is currently awaiting approval of the deal by the provincial government.
Paul Rivett and Jordan Bitove, co-owners of Torstar, the Toronto Star’s parent company, are both investors in GreenFirst. Rivett, who is chair of Torstar, is also a director and incoming chair of GreenFirst.
Doman said that while GreenFirst is a separate company from Torstar, the company will supply the publisher with newsprint. Looking toward the future, Doman says GreenFirst intends to spend capital on operations with the goal of reducing costs and increasing production.
“What’s most important to us is our employees, and we really want to make these operations productive so that they can create more stable and sustainable employment in these communities,” Doman said.