Paper Excellence enters agreement to acquire Domtar
For the City Times
RICHMOND, BC/FORT MILL, SC – Paper Excellence, a global diversified manufacturer of pulp and specialty, printing, writing, and packaging papers, and Domtar, a provider of fiber-based products, announced on May 11 that they have entered into a strategic business combination under which Paper Excellence will acquire all Domtar common stock for $55.50 per share.
“The purchase price represents a premium of approximately 37 percent to Domtar’s closing share price on May 3, 2021, the last trading day prior to the Domtar’s statement responding to media reports regarding a potential business combination between Domtar and Paper Excellence, and a premium of approximately 44% to the 30-day volume-weighted average price as of May 3, 2021. The all-cash transaction represents an enterprise value of approximately $3.0 billion,” a Domtar release stated.
“After the transaction closes, Paper Excellence intends to continue the operations of Domtar as a stand-alone business entity. As such, Domtar will continue to be led by its management team and Paper Excellence plans to retain its corporate and production locations.”
“We are excited to add Domtar and its employees to the Paper Excellence global family. This marks a major step in our global strategy of identifying well-positioned assets and positioning them for growth. Domtar is a natural fit for our culture of operational excellence. We are enthusiastic about entering the American market as we continually improve Paper Excellence’s ability to serve its expanding blue-chip customer base,” said Global Chief Financial Officer of Paper Excellence Joe Ragan.
“We have long admired Domtar’s expansive global footprint and believe that it will be a valuable addition to Paper Excellence. We look forward to investing in Domtar’s assets and people for long-term growth.”
“This agreement enables our shareholders to realize certain and immediate cash value at a significant premium for their shares,” said John D. Williams, Domtar president and CEO. “This transaction validates our long-term strategic plan for our leading paper and pulp businesses, and for our continued expansion into packaging.”
“Our dedicated employees have been instrumental to Domtar’s success and I am glad to see that this transaction supports the strategy that our team has worked so hard to develop over the last several years. As part of Paper Excellence, we will build on that momentum.”
The agreement was unanimously approved by the Domtar Board of Directors. The transaction is expected to close in the second half of 2021, subject to Domtar shareholder approval, receipt of the required regulatory approvals and other customary closing conditions.
Domtar owns mills in Nekoosa and Rothschild.