MONTREAL – Resolute Forest Products (TSX:RFP) is entering the tissue market earlier than planned after buying Florida producer Atlas Paper Holdings for US$156 million, including working capital.
Atlas, with 360 employees, makes branded and private label tissue products from virgin and recycled fibres, with an annual production capacity of 59,000 tonnes.
Resolute indicated no layoffs were planned.
Prior to the Atlas takeover, the company was already planning to enter the multibillion-dollar North American tissue market, investing US$270 million to produce about 60,000 tonnes of tissue at its plant in Calhoun, Tenn., by early 2017.
Like other forestry companies, Resolute is looking for ways to offset the declining demand for newsprint and commercial paper.
The purchase price includes unspecified working capital. Resolute expects Atlas will generate about US$23 million in annualized pre-tax operating earnings starting in the first quarter.