Rubicon plans to sell Tenon stake for $15.3M
Friday 15 Dec 2017Rubicon, the NZX-listed forestry biotech company, has agreed to sell its remaining holding in its Clearwood manufacturing business for about $15.3 million, to focus on its ArborGen forestry genetics business.
Auckland-based Rubicon will sell its 44.88 percent interest in Tenon Clearwood Ltd Partnership for US$14.2 million, which is the cost of its investment in the company in April, plus its share of the reduction in the company's net debt since then, it said in a statement.
The proposed buyers are Dorset Management Corp. and Libra Partners NZ LLC, who will each take 20 percent, with the existing owners of the Clearwood partnership taking the remaining 4.88 percent, it said. Dorset is affiliated with Rubicon's biggest shareholder Knott Partners, which owns 28 percent of the company, while Libra is its second-biggest investor with an 18 percent stake.
Rubicon has been exiting its peripheral investments to focus on its ArborGen business, which it believes will benefit from the new Labour-led government's policies to support the forestry sector and expand afforestation. ArborGen turned positive on an earnings before interest, tax, depreciation and amortisation basis in the last financial year and is expected to be cash positive from now on as its focus turns to commercialising past investment in research.
The proposed transaction is subject to shareholder approval which will be sought at a meeting of Rubicon shareholders slated for mid-January, with the deal expected to close on Jan. 31, the company said.
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