Paper Excellence is picking up the Dryden mill as part of a $3 billion dollar transaction with Domtar.
The Richmond, B.C. based company is purchasing Domtar for $55.50 per share in an all-cash deal.
After the transaction closes, Paper Excellence intends to continue the operations of Domtar as a stand-alone business entity.
Both companies say Domtar will continue to be led by its management team and Paper Excellence plans to retain its corporate and production locations.
The agreement has been unanimously approved by the Domtar Board of Directors and the transaction is expected to close in the second half of this year.
Paper Excellence operates eight kraft and pulp mills in British Columbia, Saskatchewan and Nova Scotia.
Their Canadian facilities employ 3,000 with production of more 3 million tonnes in pulp, printing and writing, packaging, and specialty paper.
They have been looking at entering the U.S. market.
Joe Ragan, Global Chief Financial Officer of Paper Excellence, says, “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.”
Ragan adds, “We have long admired Domtar’s expansive global footprint and believe that it will be a valuable addition. We look forward to investing in Domtar’s assets and people for long-term growth.”
Domtar President and Chief Executive Officer John Williams says, “This transaction validates our long-term strategic plan for our leading paper and pulp businesses, and for continued expansion into packaging.”
Williams adds, “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. As part of Paper Excellence, we will build on that momentum.”
At time of the announcement Tuesday morning, Domtar shares went up to $65.48, a significant hike from Monday’s $57.28 closing.
Domtar purchased the Dryden Mill from Weyerhaeuser as part of a $520 million deal in March, 2007.
