Evidence of Boynton's failuresParsing through RYAM numbers for this year one can see that the TMB assets are the only value left in this company. 2018 EBITDA numbers look like they will finish as follows:
Paper pulp : 102mm
Paper: 58mm
Lumber: 40mm
SC: 233mm
Total: 433mm (before SG&A)
The TMB assets can be credited with $290mm of total EBITDA (and this is putting zero growth on SC from the TMB assets which is very unlikely given the ethers business was booming and margins were expanding at 5-8%. TMB was far less exposed to acetate due to thier decision many years ago to invest in R&D and move to new markets such as ethers, unlike RYAM who decided to sleep at the wheel).
Given the above RYAM assets can be estimated to have generated $143mm in EBITDA before SG&A (estimated around $37mm stand-alone using yearly info from 2016's annual report). So that leave about $107mm in EBITDA from the RYAM assest, before maintenance CAPEX, interest payments and taxes. Again, based on 2016 numbers the interest expense can be estimated at around $36mm and income tax at $39mm. CAPEX was $88mm. So today one could extrapolate that RYAM's assets generate negative $56mm in cash flow or quite simply put WORTHLESS!
The TMB assets are the only reason this company is afloat today and they are still worth a lot as they are low cost and have the right R&D configuration (i.e. they are aligned with growing markets).
For some reason the BOD, Boyton ad his team get to keep their jobs and are probably going to award themselves very big bonuses this year. Meanwhile the TMB assets are being encumbered by RYAM shitty business and management.
A hostile takeover by a larger player should happen here. Synergies alone would pay for a takeout in the $222-25 range. I am sure a hostile would succeed as shareholders are fed up with Boynton & Co. A hostile would only want the assets and the lower level operating management. The executive is all expendible as they bring no value. $22 a share is approximately 6x current EBITDA ($2.4 billion) and the synergies would easily justify a takeover in the $22-25 range. Consider the following eliminations/synergies which a buyer would benefit from:
1) SG&A reduction of $30-40mm with the elimination of the public company structure, BOD and executive management.
2) Dividends paid on existing shares (est. 60mm outstanding) of $18mm.
3) Operating losses from TMB acquisition of US$600-700mm.
4) Cash on the balance sheet of $100mm.
When one considers the above there is plenty of reason why a larger player (Domtar, IP, Westlake, etc...) would easily be able to justify an acqusition of RYAM. Following the acquisition they could dispose of the lumber assets, paper assets and paper pulp assets. Based on above 2018 EBITDA an acquirer could probably sell the lumber facilites for $200mm (5x EBITDA), paper assets for $232mm (4x EBITDA) and paper pulp for $600mm (6x EBITDA). The remaining SC assets would be the crown jewels the acquirer would want and have bought for 5.8x EBITDA when considering the potential synergies/eliminations and post transaction asset sales.
Undoubtedly RYAM has already been approached by potential acquirors. It would not be a surprise in the slightest if RYAM completely disregarded their fiduciary duty to consider and present an offer to shareholders. Nothing in RYAM's history shows any regard for shareholder interests or increasing the value of shareholder equity. The BOD is more interested in protecting their jobs as well as that of Boyton and his useless management team.