- NewLife Forest Restoration LLC recently announced that it closed a $200 million “sustainability-linked” bond financing. These are the details.
NewLife Forest Restoration LLC – a leading sustainable forest products business in the Southwest United States – recently announced it has raised new funding to scale its forest restoration activities and reduce the incidence of catastrophic wildfires.
The company had closed a $200 million “sustainability-linked” bond financing to fund the expansion of NewLife’s wood products manufacturing facilities and forest restoration capacity, enabling a significant increase in annual acreage restored.
Goldman Sachs acted as the underwriter and placement agent on the financing. And the “sustainability-linked” bond issued by the Arizona Industrial Development Authority is one of the first of its kind in the U.S. “green bond” market and mandates specific forest restoration targets.
NewLife is known as the largest vertically integrated forest products business in the Southwest region with next-generation manufacturing facilities currently producing value-added wood products. And NewLife works closely with an ecosystem of local industry partners including mechanical thinning crews and smaller forest products manufacturing facilities.
NewLife has developed a manufacturing system to extract value from the low-quality fiber removed from the forest as part of its restoration initiatives. And the expansion program will dramatically increase the total industry processing capacity within the Four Forests Restoration Initiative (4FRI) operating area, enabling large-scale forest restoration efforts across Arizona. The company is going to restore 25,000 acres of forestland per year, dramatically expanding the capacity to proactively address the rising concerns of wildfire.
Through its subsidiary, NewLife is contracted by the U.S. Forest Service (USFS) as part of the 4FRI. And the landscape-scale restoration project was designed to combat the impact of climate change and reduce the risk of catastrophic wildfire by restoring the forests to a more natural state while protecting large healthy trees, wildlife, and the watershed. Wildfires have been devastating the western forests, endangering local towns, causing severe damage, and unleashing huge quantities of greenhouse gases.
Plus NewLife managed Phase 1 of the 4FRI contract, the nation’s largest forest stewardship contract, since 2017 and partners with the USFS on mechanical thinning initiatives throughout Arizona with plans to expand to neighboring states.
The company plans to use the proceeds of the bond to complete the build-out of its 425,000-square-foot industrial facility in Bellemont, Arizona, which will include a new high-speed sawmill, planer mill, and dry kilns. And NewLife will also double the capacity of its Engineered Wood Products (EWP) plant and significantly expand the capacity of NewLife’s Lumberjack sawmill located near Heber, Ariz.
Production from the new sawmill is going to commence in the next 6 months and scale to full capacity in 2023, in a multi-phase roll-out that will create hundreds of new jobs with opportunities in the sawmill, remanufacturing facilities, forest operations, and hauling operations.
NewLife is majority-owned by Lateral Investment Management, a San Mateo, California-based private equity investment firm focused on transformational growth companies in the US middle market. And Lateral has invested more than $100 million in NewLife and was a participant in the bond offering.
KEY QUOTES:
“These funds transform our company’s ability to lift Arizona’s forest restoration efforts to the much-needed level of scale. Not only will we accomplish our core mission, which is to restore the health of the forests and prevent wildfires, but we will make the whole industry sustainable and profitable.”
“The high-value wood products we manufacture serve customers in some of the largest home building markets in the United States with the highest quality softwood products in the region.”
— NewLife CEO Ted Dergousoff
“NewLife has reshaped the challenging economics of forest restoration. We believe that NewLife can become the engine behind a sustainable forest products industry in Arizona at the forefront of combating climate change.”
“We think the public-private model in Arizona, which empowers local industry with NewLife’s production infrastructure at the core, will be the blueprint for forest restoration worldwide.”
— Lateral Managing Partner Richard de Silva
