Feb 11, 2008. /Lesprom.com/. Catalyst Paper Corporation announced that it has entered into a definitive agreement with a subsidiary of AbitibiBowater to acquire its Snowflake Arizona recycled newsprint mill for a total consideration of $161 million in cash. The purchase price excludes trade receivables of approximately $19 million that are being retained by AbitibiBowater. The Snowflake mill, a leading recycled newsprint producer with annual production capacity of 375 thousand metric tonnes on 2 modern paper machines, is regarded as one of the lowest cost newsprint mills in North America. The acquisition of the Snowflake mill will increase Catalyst Paper's total newsprint production capacity to approximately 980 thousand metric tonnes. "Snowflake is a first-class newsprint mill," noted Richard Garneau, president and CEO of Catalyst Paper. "We are very pleased to announce this transaction as the Snowflake mill will improve our cost-competitiveness, strengthen our presence on the west coast of North America and provide us with a more freight logical way to serve existing as well as new customers. In addition, this acquisition will provide Catalyst with a natural hedge against Canadian dollar fluctuations and is particularly timely in the current environment of virgin fibre supply constraints." The acquisition of the Snowflake mill is subject to the consent of the U.S. Department of Justice, other customary conditions and completion of the rights offering financing and is expected to close in the 2Q 2008. The transacting parties have also agreed to a three-year supply contract under which AbitibiBowater will provide approximately 40% of the Snowflake mill's recycled fibre supply in the first year, decreasing in proportion over the life of the agreement. Catalyst Paper intends to source the remainder of the mill's fibre requirements directly from the recycled fibre market in western North America. Catalyst is a leading producer of mechanical printing papers in North America. The company also produces market kraft pulp and owns western Canada's largest paper recycling facility.