The mayor of Edmundston says the pending sale of Twin Rivers Paper Company to a pair of New York-based private investment companies is good news for his city.
Atlas Holdings and Blue Wolf Capital have reached an agreement to buy a controlling interest in Twin Rivers, which runs specialty paper and lumber product mills in Edmundston, Plaster Rock, and Madawaska, Me.
"People in the city were talking about that yesterday when the announcement was made and we felt that, I mean, the future is brighter with this announcement," said Mayor Cyrille Simard.
"The whole forestry cluster that grows around Twin Rivers is important, not only for the city, but for the region as a whole."
The deal is expected to close within three weeks. Term of the agreement were not disclosed.
The mill in Edmundston employs about 400 people, making it the biggest taxpayer in the city, said Simard.
It has been in operation for more than 80 years.
About 600 people work at the Madawaska location.
Forest industry rebounding
Simard says he likes what he's heard from the new owners and expects they will reach out to employees.
"People from the company always talk about how they can improve efficiency by engaging more people in the process and Blue Wolf has a pretty impressive track record in working with employees around the world," he said.
"So I don't see dramatic change and that's what I hope also."
Tim Fazio, of Atlas Holdings, says the deal is based on the belief that the U.S. housing crisis is over and the forest products industry has a few good years ahead.
"The lumber business is certainly improving in the U.S. and I think we will seek ways to expand the production of lumber products coming out of the Plaster Rock mill," he told CBC News.
"With the active support, direction and guidance our firms bring, we believe we can provide Twin Rivers with additional resources to address its capital needs, cost structure, market exposure and other critical operational challenges presented by the highly competitive forest products industry," Fazio said in a statement.
The companies will be looking for ways to do more with less, but don't foresee the need for any dramatic changes, officials said.
"Twin Rivers produces specialty papers and lumber products that are well regarded throughout the industry. Our plan is to build on these strengths as we seek to position the operations for long-term success and as a key contributor in the revitalization of the forest products sector in Maine and New Brunswick," Adam Blumenthal, managing partner of Blue Wolf said in a statement.