Vancouver, British Columbia, Canada 14 May 2015 -- / ACCESSWIRE / -- Jemi Fibre Corp. (TSX-V: JFI) ("Jemi Fibre" or the "Company") is pleased to announce it has entered into a letter of intent to acquire all of the issued and outstanding shares of L&M Wood Products (the "Transaction").
Located in Glaslyn Saskatchewan, L&M Wood Products ("L&M") is a fully integrated wood products company focused on producing and developing value added wood products for diversified markets. The L&M facility is situated on 430 acres of land and includes:
- Saskatchewan's largest timber producing sawmill, upgraded in 2008, with an oversize head rig (optimized) saw and standard size log line;
- Post and wood treatment plant operating as Saskatchewan's largest producer of treated wood products servicing the agricultural market;
- Dowler producing high quality, value added rails;
- Firewood processor with production capacity of up to 6,000 cords per year; and
- Re-manufacturing plant with an incisor, planer, multi-rip saw, band resaw and bundle cutter, all focused on custom, on-demand products such as specialty grooved dunnage and lathe.
In connection with the Transaction, the Company will also be acquiring:
- L&M's Forest Management Agreements with the Province of Saskatchewan, allowing an annual harvest of 205,000 cubic metres of hardwood and softwood;
- P&E Logging, a stump-to-dump logging company with approximately $8 million of equipment and capacity to harvest and haul up to 200,000 cubic metres timber annually; and
- 60% of L&M Wood Residues which sells bark, peelings, shavings and sawdust for use in agricultural, industrial and oilfield applications and has a capacity to transport 40,000 green tonnes of wood residue material per year.
The purchase price for the Transaction, subject to adjustments for debt balances at closing, is $16 million consisting of $5.3 million in cash, $3 million in Jemi Fibre common shares and the assumption of $7.7 million in debt. The Company has commenced its due diligence under the letter of intent and anticipates further announcements as the process continues.
Mike Jenks, Chairman & CEO, commented "This acquisition is a natural extension of our vertical integration strategy and an opportunity to add scale to our growing wood treatment division. Similar toprevious acquisitions, we anticipate applying our industry experience and harvesting capabilities to improve capacity, profitability and provide an attractive return on investment."
Completion of the Transaction is subject to conditions in the ordinary course of transactions of this nature, including acceptance by the TSX Venture Exchange. There can be no assurances that the Transaction will be completed.
The company also announces that the TSX Venture Exchange has approved an exchange of $281,984.86 of debt into 469,975 of common shares of the Company at a price of $0.60 per share, previously announced on April 13, 2015.About Jemi Fibre
Jemi Fibre is a British Columbia based forest products company which trades on the TSX Venture Exchange under the symbol JFI. Jemi Fibre's operations consist of a full service contract logging division, with operations in Mackenzie and Cranbrook, a sawmill located in Edgewater producing high value lumber products, a manufacturing facility in Cranbrook producing pressure treated posts, rails and lumber for agricultural and industrial use, and private timberlands located in the Kootenay region.
Forward Looking Statements
Certain statements included herein constitute forward-looking statements. The words "expect", "intend", "anticipate", "propose" and "may" and similar expressions identify forward-looking statements. Forward-looking statements include, among other things, such risks, uncertainties and other factors set forth under "Risk Factors" in the Company's current MD&A filed with the British Columbia Securities Commission. Forward-looking statements are necessarily based upon a number of estimates and assumptions. While such estimates and assumptions are considered reasonable by the management teams of Jemi, they are inherently subject to significant business, economic, competitive and regulatory uncertainties and risks and accordingly may not occur as described herein or at all. Investors are cautioned that forward-looking statements are not guarantees of future performance or events and, accordingly are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty of such statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
SOURCE: Jemi Fibre Corp.