Main asset is worth far more in M&A; or 6x more to replaceI’d also note that Northwood is the biggest NBSK (the good pulp not the junk from the ecuyclupis (SP) weeds in Brazil) in North America. It a 600k ton mill.
That’s going to be $2000 a ton replacement value. So that’s a $1.2B asset, ostensibly, if you built it today.
Some of you might have seen it. It's not a bad one -- they strap the chip trucks into a rocket lanch and tilt em up to 90 degrees to dump. Wild stuff.
Precedent transactions are going to be in the $500 to $1000 per ton range right. When $WY divested if pulp arm it was more like $1200 USD ton. That was to IP in 2016 as I recall.
Nothing wrong with the one big asset and there are lots of chips to run it. It’s just not enough to run three in PG, thus the closure of PG Pulp. Dunno about Intercon but it’s got a cool name so maybe they can keep it running. It’s got a capacity of 330k tons.
My view is Northwood is at minimum a $300MM asset and the market cap of this CFX debacule is sub $200MM. At worst Intercon is gonna be worth maybe $300 a ton so it’s like a $100MM asset assuming they can keep it wooded up. That’s really not that much of a stretch right there is a lot of residuals around there esp once Mackenzie starts sawing more (see Conifex).
So the fair market value at worst is an EV of a min if $400MM or about $6 a share. But realistically I could see NW sell for like $750/ton right so that’s more like $450MM for that asset alone.