Paper Excellence and Domtar 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 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.
“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 CEO of Domtar. “This transaction validates our long-term strategic plan for our leading paper and pulp businesses, and for our continued expansion into packaging.”
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.
Paper Excellence, headquartered in British Columbia, is a diversified manufacturer of pulp and specialty, printing, writing, and packaging papers.
Domtar is a leading provider of fiber-based products.
