Domtar set to be acquired
Wednesday, May 12, 2021
Canadian group Paper Excellence is set to acquire the much larger US-headquartered papermaker Domtar.
Domtar is listed on the New York Stock Exchange and has sales of $3.7bn (£2.6bn). It employs around 6,400 staff.
It is the biggest integrated manufacturer of uncoated freesheet (woodfree) paper in North America and one of the world’s largest pulp manufacturers.
Paper Excellence has sales of around CAD$2.4bn (£1.4bn) and employs 2,800.
It makes pulp that is used for packaging, papers, tissues and towels, and also makes printing, writing and packaging papers.
The two companies have announced a “strategic business combination” that will see Paper Excellence acquire Domtar in a $55.50 per share cash deal, which values Domtar at around $3bn.
In its most recent annual results, for 2020, Domtar had European sales of $117m.
It makes a range of pulp and paper products, with its paper range including printing and publishing papers, office papers, digital and production inkjet papers, and speciality papers.
Domtar also makes a range of Xerox-branded papers and speciality media.
Paper Excellence said it intended to continue to operate Domtar as a standalone business once the deal is finalised, which is expected to be in the second half of the year subject to shareholder approval.
Joe Ragan, global chief financial officer at Paper Excellence, commented: “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.”