RICHMOND, British Columbia/FORT MILL, SC –– Domtar Corporation, which laid off over 100 employees at its southwest Arkansas facility last year, has been sold to a pulp manufacturing company in Canada for $3 billion.
In Aug. 2020 Domtar permanently idled its paper mill in Ashdown and laid off 109 employees.
Paper Excellence, a global diversified manufacturer of pulp and specialty, printing, writing, and packaging papers, announced Tuesday that they have entered into a strategic business agreement to acquire all of the issued and outstanding shares of Domtar common stock for $55.50 per share, in cash.
The purchase price represents a premium of 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 May 3. The all-cash transaction represents an enterprise value of $3 billion.
After the transaction closes, Paper Excellence intends to continue the operations of Domtar as a stand-alone business entity. Domtar will continue to be led by its management team and Paper Excellence plans to retain its corporate and production locations.
Paper Excellence Global Chief Financial Officer Joe Ragan said, “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.”
Ragan added, “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.”
Domtar President and Chief Executive Officer John D. Williams said, “This agreement enables our shareholders to realize certain and immediate cash value at a significant premium for their shares. This transaction validates our long-term strategic plan for our leading paper and pulp businesses, and for our continued expansion into packaging.”
Williams added, “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.”