KINGSPORT – A Canadian pulp and paper company has agreed to acquire Domtar in a $ 3 billion cash transaction that will allow the company to continue to be led by its management team and the plant. Kingsport will continue to operate.
Domtar made the announcement on its website Tuesday afternoon, saying the company has entered into a strategic business combination with Paper Excellence – a private manufacturer of specialty pulp and paper, printing, writing and packaging in attendance. in Canada and Brazil.
Paper Excellence is based in the Netherlands and its head office is in Richmond, British Columbia. It is the second largest pulp and paper producer in Canada.
Pursuant to the agreement, Paper Excellence will acquire all of the issued and outstanding common shares of Domtar at a price of $ 55.50 per share in cash. The purchase price represents a premium of approximately 37% over Domtar’s closing share price on May 3.
âWe are thrilled to add Domtar and its employees to the global Paper Excellence family,â said Joe Ragan, Global Chief Financial Officer of Paper Excellence. âThis marks a major step in our global strategy of identifying well-positioned assets and positioning them for growth. Domtar fits naturally into our culture of operational excellence.
Domtar’s main executive office is in Fort Mill, South Carolina. The Kingsport plant has been in the city center since 1916, and its conversion from producing fine paper to producing cardboard packaging will keep it here for another 100 years, company officials said recently.
Last week, Domtar officials confirmed that its management was in talks with another company about a possible deal.
Once the transaction is completed, Paper Excellence intends to continue Domtar’s operations 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, according to a press release regarding the acquisition.
âOur Kingsport plant has been sold and renamed several times over many years, and each change has had a positive effect in our community. I have no doubts that it will be the case this time as well, âsaid Miles Burdine, President and CEO of the Kingsport Chamber of Commerce. “Our factory has been in existence for over 100 years and another hundred years of success is in the future for Kingsport.”
The agreement was unanimously approved by Domtar’s board of directors. The transaction is expected to close in the second half of 2021, subject to approval by Domtar shareholders, receipt of required regulatory approvals and other customary closing conditions.
City Manager Chris McCartt said after speaking with local Domtar representatives it has been made clear that the acquisition will be a positive and strategic move for the company and the plant.
âI was pleased to hear that the conversion of the plant will continue, which when completed will create competitive jobs just like the plant has done for over 100 years,â said McCartt.