Photo / Tim Greenway
Joshua Henry, co-founder and president of GO Lab Inc.
November 29, 2021
GO Lab to sell $85M in bonds for mill renovation
FILE
Matt O’Malia, of GO Lab Inc., shows off a sample of the startup's insulation.
By Jessica Hall
Belfast-based startup GO Lab Inc., which plans to manufacture wood fiber insulation in the former UPM Paper mill in Madison, will sell $85 million in tax-exempt green bonds to help finance the plant's $130 million renovation.
The bonds will be issued by the Finance Authority of Maine, which approved them earlier this year. The bonds are expected to be priced in early December with the transaction expected to close about 10 days later. The equity fundraising round will close with the bond sale, along with a New Market Tax Credit investment.
GO Lab plans to produce three wood fiber insulation products for the residential and light commercial construction markets under the brand name TimberHP. GO Lab Madison LLC, a subsidiary of GO Lab Inc., will use proceeds from the bond sale, in combination with equity, government grants and loans, and the tax credits, to renovate the paper mill.
The partners in the Madison mill, Finland-based UPM-Kymmene Inc. and New York Times Co. subsidiary Northern SC Paper Corp., ended their joint venture and closed the Madison Paper Industries in May 2016. GO Lab closed on its purchase of the mill for $1.9 million three years later.
Go Lab plans to hire 120 workers at the plant.
GO Lab has selected Cianbro Corp. to be the lead contractor on the Madison overhaul.
“We are thrilled to have Cianbro as our partner in bringing the Madison mill back to life,” said GO Lab President Joshua Henry.
“Cianbro built this facility and has done many subsequent upgrades over the years. This mill is a testament to the quality of Cianbro's work and we’re grateful that their experience and craftsmanship will guide creation of the first wood fiber insulation manufacturing facility in North America.”
Belfast-based GO Lab was founded in 2017 to develop and manufacture wood fiber insulation products. Wood fiber board, batt, and loose fill insulation products are an easy drop-in replacement for other insulations on the market.
Wood fiber insulation products are easy and safe to install, renewable, recyclable, nontoxic, and will have a negative carbon footprint.
Under GO Lab’s current production timeline, the company expects to be producing TimberHP loose fill insulation in the first quarter of 2023, followed by wood fiber batt and board products in second and third quarters of 2023, respectively.
The bonds have been designated as ‘Green Bonds’ as defined in the International Capital Market Association 2021 Green Bond Principles — based on the opinion letter provided by Vigeo Eiris, an affiliate of Moody’s Investors Service.
GO Lab qualifies for this type of solid waste and recycling bond financing because the company will use residual softwood chips, which is the waste stream from timber harvesting and saw milling, to make wood fiber insulation for the residential and light commercial construction markets.
Citigroup Global Markets is serving as the underwriter in the sale, with Pierce Atwood LLP acting as GO Lab’s legal counsel.
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