Rentech acquires Fulghum Fibres and enters growing wood pellet industry including partnership with Graanul Invest
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. The acquisition also brings with it a joint venture with Graanul Invest, a large Esthonia based European producer of pellets, for the development and construction of pellet plants in the U.S. and Canada.
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.
Fulghum Fibre, 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.