Rayonier Advanced Materials Inc. (NYSE:RYAM) saw its stock price jump after American Industrial Partners revealed it had acquired a 5.1% ownership position in the specialty materials producer.
The private equity firm purchased 3.4 million shares for roughly $25.4 million, excluding brokerage commissions, according to a Schedule 13D filing. AIP financed the transaction using working capital and its existing credit facilities.
The equity purchase comes after AIP's earlier effort to buy Rayonier Advanced Materials outright was rebuffed. In November, the firm submitted an unsolicited cash proposal offering $11 to $12 per share. Rayonier's board declined the bid in December, stating the proposal was not in the best interests of the company and its stockholders.
Despite that rejection, AIP proceeded with the share acquisition, characterizing the holding as an attractive opportunity aligned with its fund's capital appreciation objectives. The filing further outlines how AIP foresees integrating Rayonier Advanced Materials with Global Cellulose Fibers, the fluff pulp producer AIP agreed to acquire from International Paper in August.
AIP manages approximately $17 billion in investor capital and is currently investing from a $5.1 billion fund, the filing notes. The firm said it does not plan to pursue transactions that Rayonier's board opposes, but it would consider participating if Rayonier’s directors were to explore a potential sale.
The filing also indicates AIP may open discussions with Rayonier management and other shareholders about strategic alternatives and plans to enhance value. Those conversations could touch on potential combinations or other measures the firm believes could improve shareholder outcomes, according to its stated intentions in the filing.
For investors and market observers, the disclosure offers clarity on AIP's current position: an ownership stake that is both a financial investment and a potential strategic lever tied to AIP's broader transactions in the pulp and speciality materials space.