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Canadian Company Buys Domtar in $3B Deal

2 min read

Paper Excellence of Richmond, British Columbia, said this week that it is buying Domtar of Fort Mill, South Carolina, in a $3 billion cash deal.

Domtar operates a softwood and fluff pulp plant in Ashdown (Little River County) that opened in 1968. It employed about 500 people there as of the end of last year. It has 6,400 employees in 50 countries.  

Paper Excellence, which makes pulp and specialty, printing, writing and packaging papers, said it will operate Domtar as a stand-alone business entity. Domtar’s management team and corporate and production locations will remain unchanged, the company said.

“We are excited to add Domtar and its employees to the Paper Excellence global family,” Paper Excellence Global CFO Joe Ragan said in a news release. “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.”

Domtar announced in August that it would close its paper machine in Ashdown, laying off 109 people. But it continues to produce softwood and fluff pulp there. The closure was part of a companywide effort that laid off nearly 800 people and cut costs by $200 million.

“This agreement enables our shareholders to realize certain and immediate cash value at a significant premium for their shares,” Domtar President and CEO John D. Williams said. “This transaction validates our long-term strategic plan for our leading paper and pulp businesses, and for our continued expansion into packaging.”

Per the deal, Paper Excellence will acquire all issued and outstanding shares of Domtar common stock for $55.50 per share, in cash, a premium of about 37% to Domtar’s closing share price on May 3 — the last trading day before media reports about the possibility of an acquisition.

Ragan said his company looks forward to “investing in Domtar’s assets and people for long-term growth.”

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