Denver, Colorado, USA 08 May 2013 -- Rentech, a wood fibre and nitrogen fertilizer businesses operator, recently announced the acquisition of Georgia-based Fulghum Fibres, Inc. (Fulghum Fibres) and the acquisition of two facilities for conversion to the production of wood pellets in Ontario, Canada. These steps position Rentech to develop a world class wood processing business for production of high-quality wood chips and pellets.
Rentech expects these investments to be funded from cash on hand, expected distributions from Rentech Nitrogen, and investments from a joint venture partner.
Fulghum Fibres is expected to have approximately $10 million of operating income and $20 million of EBITDA in calendar year 2013, consistent with its stable financial history. The net purchase price, including assumed debt, is $112 million. The company, founded nearly 25 years ago, has been consistently profitable and maintains a solid reputation as a producer of high quality wood chips and other services to a diversified customer base in the pulp and paper industries in the U.S., South America and Asia. The acquisition provides Rentech with immediate stable cash flow with growth opportunities, and a platform to launch into the growing and complementary global wood pellet industry. The acquisition also brings with it a joint venture with Graanul Invest, a large European producer of pellets, for the development and construction of pellet plants in the U.S. and Canada.