Tembec reaches agreement to sell Toronto flooring plant assets and Muskoka, Vintage brands to private company for C$13M; Huntsville, Ontario, hardwood flooring plant will also close, impacting 63 jobs
November 21, 2011
– Tembec has reached an agreement with a private company to sell its Toronto (Ontario) flooring plant assets along with its Muskoka and Vintage brands. The closing of this transaction is expected to take place within the next few weeks.
Tembec will also close the Huntsville (Ontario) hardwood flooring plant, impacting 63 people. This plant will cease operations in January 2012. Management has met with employees to inform them of the Company's decision.
The selling price related to the transaction is $13 million. The sale of the Toronto plant and the shutdown of the Huntsville plant will result in a one-time charge of $2 million that will be recorded in the Company's December 2011 quarterly financial results. During the last 12-month period, the Toronto and Huntsville flooring plants generated sales of $48 million, EBITDA of $1.9 million and operating earnings of $1.6 million.
"The sale of the hardwood flooring division is consistent with our strategy to focus on the Company's core businesses," stated Tembec President and Chief Executive Officer James Lopez.
The Tembec hardwood sawmill operations located in Huntsville are unaffected by this transaction.
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.