A Richmond-based pulp and paper producer is expanding into the US, after striking a US$3 billion all-cash deal to acquire Domtar Corp.
Under the agreement, Paper Excellence will pay US$55.50 per Domtar share in the transaction, about 37 per cent of Domtar’s closing share price on May 3.
“We have long admired Domtar’s expansive global footprint and believe that it will be a valuable addition to Paper Excellence. We look forward to investing in Domtar’s assets and people for long-term growth,” said Joe Ragan, global chief financial officer of Paper Excellence, in a statement.
Paper Excellence operates seven pulp and paper mills in Canada, five of which are in B.C., along with a distribution centre in Surrey and a total workforce of more than 2,800.
Domtar has offices in South Carolina, US and in Montreal, and operates paper mills across the US as well as in Kamloops and Ontario.
The transaction is expected to close in the second half of this year, and Paper Excellence will continue operations of Domtar as a “stand-alone business entity.”
This means Domtar will continue to be led by its management team and Paper Excellence intends to retain Domtar’s corporate and production locations.