Segezha Turns Top Russian Forest Holder in $515 Million Deal
(Bloomberg) -- Segezha Group will double the amount of forests it controls in a $515 million deal with a minority shareholder to become one of world’s biggest woodland leaseholders.
The Russian wood, paper and packaging producer agreed to buy 100% of Inter Forest Rus LLC from the investment company Bonum Capital for $515 million, according to statements from Segezha and Bonum on Monday. After the acquisition, Segezha will have 16 million hectares of forests under management and its annual allowable cut will almost double to 23.6 million cubic meters.
“This is a transformational transaction for Segezha Group and one that will enable us to take a significant step in developing our assets,” Mikhail Shamolin, president of Segezha Group, said in the statement.
Segezha, controlled by billionaire Vladimir Evtushenkov’s Sistema PJSC, raised $400 million in an initial public offering in Moscow in April, and said it planned to use some of the proceeds for acquisitions. Bonum Capital was the largest investor in the IPO, people said at the time.
To fund the deal, Segezha Group may sell up to 25 billion rubles ($349 million) of new bonds and will use 10 billion of IPO proceeds on top of 15 billion rubles of cash, it said in a presentation. The transaction is expected to close in early 2022, subject to regulatory and shareholder approvals.
Segezha’s shares advanced as much as 6.4% to a record high in Moscow on Monday after the deal was announced.
Inter Forest owns resources in the Irkutsk and Krasnoyarsk regions in Siberia as well as wood processing and logging enterprises, and a river fleet of 98 vessels. Bonum consolidated those assets through debt and cash deals.
Separately, Bonum Capital has entered into a sale and purchase agreement to acquire a $150 million stake in Segezha Group from Sistema, according to the Monday statements from Bonum and Sistema. This could make Bonum the largest minority shareholder with about 13%, the investment firm said.
Bonum was founded in 2013 by Murat Aliev, a former executive at billionaire Suleiman Kerimov’s investment company. Aliev is the sole owner of Bonum, whose main business has been trading stocks. It also works in private equity, venture capital, Russian real estate and distressed assets.
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