Upon closing of the deal, Paper Excellence aims to continue the operations of Domtar as a stand-alone business entity
Canada-based Paper Excellence has agreed to acquire fibre-based products provider Domtar for an enterprise value of around $3bn.
Under the deal, Paper Excellence group of companies will purchase all of the issued and outstanding shares of Domtar common stock by paying $55.50 per share.
Domtar offers a range of fibre-based products such as communication, speciality and packaging papers, market pulp and air-laid nonwovens.
The company claims that it is the largest integrated manufacturer and marketer of uncoated freesheet paper in North America.
With around 6,400 employees, the company carries out operations in more than 50 countries across the world.
Domtar president and CEO John Williams said: “This agreement enables our shareholders to realise 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.”
Upon the completion of the deal, Paper Excellence aims to continue the operations of Domtar as a stand-alone business entity.
Paper Excellence intends to retain Domtar’s corporate and production locations and Domtar will continue to be led by its management team.
Paper Excellence global chief financial officer Joe Ragan said: “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.”
The deal is expected to be closed in the second half of this year, subject to Domtar shareholder approval, receipt of the required regulatory approvals and other customary closing conditions.
Barclays is acting as exclusive financial advisor to Paper Excellence on the transaction, while Latham & Watkins, McMillan, Miller Titerle, and Mehigan are acting as legal advisors to Paper Excellence.
Morgan Stanley is acting as exclusive financial advisor to Domtar on the transaction, while Debevoise & Plimpton and Osler, Hoskin & Harcourt are acting as legal advisors to Domtar.
Based in British Columbia, Paper Excellence is engaged in the manufacturing of pulp and speciality, printing, writing, and packaging papers.