Paper Excellence (Richmond, BC) and Domtar (Montreal & Fort Mill, South Carolina), have entered into a strategic business arrangement under which the Paper Excellence group of companies will acquire all of the issued and outstanding shares of Domtar common stock for $55.50 (USD) per share in cash. Paper Excellence is a diversified manufacturer of pulp and paper – including printing and writing, packaging, and specialty papers – that has built a vast network of mills and chipping plants. Montreal-based and South Carolina-based Domtar is an integrated manufacturer and marketer of uncoated free-sheet paper in North America, and one of the largest manufacturers of pulp in the world. It has 13 pulp and paper mills and 10 manufacturing and converting facilities across Canada and the U.S. 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.
The all-cash transaction represents an enterprise value of $2.8 billion (USD), or about $3 billion Canadian dollars. After the transaction closes, Paper Excellence intends to continue the operations of Domtar as a stand-alone business. As such, Domtar will continue to be led by its current 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,” said Joe Ragan, Global Chief Financial Officer of Paper Excellence. “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. We have long admired Domtar’s expansive global footprint and believe that it will be a valuable addition to Paper Excellence. We also look forward to investing in Domtar’s assets and people for long-term growth,” Ragan added.
“This agreement enables our shareholders to realize certain and immediate cash value at a significant premium for their shares,” said John D. Williams, President and CEO of Domtar. “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’m 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,” Williams added.