(All financial information is in U.S.
Dollars)
Strategic transaction to accelerate Paper
Excellence’s growth strategy, including entry into attractive US
market; expands Domtar’s financial resources, potential customer
base and product offerings
Paper Excellence, a global diversified manufacturer of pulp and
specialty, printing, writing, and packaging papers, and Domtar
(NYSE: UFS) (TSX: UFS), a leading provider of fiber-based products,
today announced that they have entered into a strategic business
combination under which the Paper Excellence group of companies
will 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 approximately 37% to
Domtar’s closing share price on May 3, 2021, 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, 2021. The all-cash
transaction represents an enterprise value of approximately $3.0
billion.
After the transaction closes, Paper Excellence 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.
Joe Ragan, Global Chief Financial Officer of Paper Excellence,
commented, “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.”
“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,” concluded Mr. Ragan.
“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 Chief Executive Officer 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,” continued Mr. Williams. “As part of Paper
Excellence, we will build on that momentum.”
Transaction Details
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.
Advisors
Barclays is serving as exclusive financial advisor to Paper
Excellence and Latham & Watkins, LLP, McMillan, LLP, Miller
Titerle LLP, and Mehigan LLP, are serving as legal advisors to
Paper Excellence.
Morgan Stanley & Co. LLC, is serving as exclusive financial
advisor to Domtar and Debevoise & Plimpton LLP, and Osler,
Hoskin & Harcourt, LLP, are serving as legal advisors to
Domtar.
Forward-Looking Statements
Certain statements contained in this press release, the
information incorporated herein by reference, and other written and
oral statements made from time to time by us or on our behalf are
based on current expectations, projections about operations,
industry conditions, financial condition, and liquidity, may not
relate strictly to historical or current facts and may contain
forward-looking statements that reflect our current views with
respect to future events and financial performance including the
proposed transaction between Domtar and Paper Excellence. As such,
they are considered “forward-looking statements” which provide
current expectations or forecasts of future events. Such statements
can be identified by the use of terminology such as “anticipate”,
“believe”, “expect”, “intend”, “aim”, “target”, “plan”, “continue”,
“estimate”, “project”, “may”, “will”, “should” and similar
expressions. These forward-looking statements should be considered
with the understanding that such statements involve a variety of
risks and uncertainties, known and unknown, and may be affected by
inaccurate assumptions. Consequently, no forward-looking statement
can be guaranteed and actual results may vary materially. Many
risks, contingencies and uncertainties could cause actual results
to differ materially from our forward-looking statements.
Where to Find Additional Information
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. This communication may be deemed to be
solicitation material in respect of the proposed merger between
Domtar and Paper Excellence. In connection with the proposed
merger, Domtar intends to file a proxy statement with the SEC.
SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT WHEN IT
BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION.
Security holders may obtain a free copy of the proxy statement
(when available) and other documents filed by Domtar with the SEC
at http://www.sec.gov. Free copies of the proxy statement, once
available, and Domtar’s other filings with the SEC may also be
obtained from the company. Free copies of documents filed with the
SEC by Domtar will be made available free of charge on Domtar’s
investor relations website at
https://www.domtar.com/en/who-we-are/investors-governance/investors.
Participants in the Solicitation
Domtar’s directors and executive officers may be deemed to be
participants in the solicitation of proxies in respect of the
proposed merger. Information about the directors and executive
officers of Domtar is set forth in Domtar’s annual Proxy, which was
filed with the SEC on March 25, 2021. Stockholders may obtain
additional information regarding the interest of such participants
by reading the proxy statement regarding the proposed merger when
it becomes available.
About Paper Excellence
Paper Excellence, headquartered in British Columbia, is a
diversified manufacturer of pulp and specialty, printing, writing,
and packaging papers. The company operates seven mills in Canada
producing and shipping over 2.8 million tonnes annually with a
workforce of more than 2,800. Paper Excellence is poised to
continue to grow with its strategy of operational excellence and
high-quality, cost-effective products. For more information on
Paper Excellence, please visit www.paperexcellence.com.
About Domtar
Domtar is a leading provider of a wide variety of fiber-based
products including communication, specialty and packaging papers,
market pulp and airlaid nonwovens. With approximately 6,400
employees serving more than 50 countries around the world, Domtar
is driven by a commitment to turn sustainable wood fiber into
useful products that people rely on every day. Domtar’s annual
sales are approximately $3.7 billion, and its common stock is
traded on the New York and Toronto Stock Exchanges. Domtar’s
principal executive office is in Fort Mill, South Carolina. To
learn more, visit www.domtar.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20210511005392/en/
Paper Excellence
Media Ross Lovern / Hallie Wolff Kekst Tel.: 917-842-7205 /
917-842-1127
Domtar Contacts
Investors Nicholas Estrela Director Investor Relations Tel.:
514-848-5049
Media David Struhs Vice-President Corporate Services
& Sustainability Tel.: 803-802-8031
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