By Shereen Siewert
Paper Excellence will acquire Domtar, a paper manufacturer that employs about 400 workers at the company’s Wausau-area location, in an all-cash transaction representing about $2.8 billion, company officials announced Tuesday.
Paper Excellence is a privately held manufacturer of pulp and specialty, printing, writing, and packaging papers with operations in Canada and Brazil. The company is financially based in the Netherlands with its headquarters in Richmond, British Columbia. It is the second largest pulp and paper producer in Canada.
Domtar is the largest integrated manufacturer and marketer of uncoated freesheet paper in North America, and one of the largest manufacturers of pulp in the world. The company operates a network of 13 pulp and paper mills and 10 manufacturing and converting facilities, translating to about 2.7 million tons of papermaking capacity and 1.5 million air-dried metric tons of market pulp capacity annually, according to Domtar’s official website.
The deal calls for Paper Excellence to acquire all issued and outstanding shares of Domtar common stock for $55.50 per share, in cash. The purchase price represents a premium of approximately 37% to Domtar’s closing share price on May 3, 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 the same day, company offiicals said.
Paper Excellence officials, in a statement, said they will continue Domtar operations as a stand-alone business entity, keeping its management team in place while retaining PE’s corporate and production locations.
Paper Excellence global chief financial officer Joe Ragan said the deal marks a major step in the company’s global strategy of identifying well-positioned assets and “positioning them for growth.”
“We have long admired Domtar’s expansive global footprint and believe that it will be a valuable addition to Paper Excellence,” Ragan said. “We look forward to investing in Domtar’s assets and people for long-term growth.”
Domtar president and CEO John D. Williams said the 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,” Williams said. “As part of Paper Excellence, we will build on that momentum.”
The 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 customary closing conditions.