Paper

Paper Excellence to acquire Domtar

Richmond, British Columbia-based Paper Excellence is in the process of acquiring Fort Mill, South Carolina-based Domtar. Following the acquisition, Paper Excellence will possess the pulp and paper mills operated by the former Catalyst Paper plus those belonging to Domtar. The all-cash transaction represents an enterprise value of approximately $3 billion, the firms say.

After the transaction closes, Paper Excellence says it 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,” the company states in the news release announcing the acquisition.

“We are excited to add Domtar and its employees to the Paper Excellence global family,” says Joe Ragan, global chief financial officer of Paper Excellence. “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.”

While the former Catalyst mills owned by Paper Excellence are entirely in Canada, Domtar (which itself used to be based in Montreal) has made its most significant recent investment in Tennessee, where it converted a former printing and writing mill into a containerboard mill.

An acquisition agreement has been 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 closing conditions.

“This agreement enables our shareholders to realize certain and immediate cash value at a significant premium for their shares,” says 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 am glad to see that this transaction supports the strategy that our team has worked so hard to develop over the last several years.”