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Domtar Corporation Announces Sale of Own Treatment Small business to American Industrial Companions for $920 Million

5 min read

FORT MILL, S.C.–(Company WIRE)–Jan 8, 2021–

Domtar Corporation (NYSE: UFS) (TSX: UFS) these days announced that it has entered into a definitive arrangement to sell its Particular Treatment small business to American Industrial Companions (AIP) for $920 million.

This press release features multimedia. Look at the complete release below: https://www.businesswire.com/news/residence/20210108005266/en/

The sale of Domtar’s Personal Treatment business represents the end result of a approach introduced on August 7, 2020, in the course of which the Enterprise undertook a thorough strategic overview of price-producing alternate options for the company. With this sale, Domtar is reinforcing its emphasis on setting up an business-major Paper, Pulp and Packaging organization to deliver prolonged-time period shareholder value.

“This transaction signifies a milestone in Domtar’s ongoing portfolio transformation and additional developments our strategic initiatives that will place Domtar for a sustainable and profitable potential,” explained John D. Williams, President and Main Government Officer of Domtar. “We performed a complete evaluate of strategic alternate options for Particular Treatment and imagine the sale maximizes worth to Domtar shareholders by permitting us to bolster our equilibrium sheet, enrich liquidity and invest in back shares. The sturdy fascination gained demonstrates the exceptional do the job by our workforce to boost profitability, obtain new customers and increase the functioning composition and price profile of the organization. We are self-confident that AIP is the suitable operator to progress the business enterprise and glance forward to functioning with them to execute a smooth and successful transition for the customers and staff members of Personalized Care.”

Mr. Williams continued, “The sale is an vital part of our strategic approach and will offer us with additional money and sources to fortify and commit in the long run of Domtar, leading to a additional targeted company portfolio. We are building stable development with the conversion of the Kingsport, Tennessee mill, and are enthusiastic about the prospective customers for building a substantial, worth-included packaging small business. We expect design to formally begin at Kingsport in the next quarter of 2021, environment the stage for the completion of North America’s premier lightweight containerboard facility, with the capacity to deliver and industry close to 600,000 tons of high-top quality recycled linerboard and corrugated medium, by the stop of 2022.”

Building Business-Primary PAPER, PULP AND PACKAGING Company

Domtar is executing on a very clear system to produce prolonged-time period shareholder price by refocusing its portfolio around Paper, Pulp and Packaging. Domtar has started to execute its strategic prepare to enter the containerboard marketplace with hugely aggressive property and a differentiated go-to-market method. The Kingsport conversion offers the Enterprise with a strategic entry level to establish an up to 2.5 million ton small business and develop into a extensive-expression strategic supplier to the packaging marketplace.

Domtar has formulated ideas to build containerboard into a important revenue contributor over time, whilst sustaining safe and stable funds stream through its business-leading Paper and Pulp enterprises. In Paper, Domtar has a primary market position in North America with well invested, very low price tag paper mills. Paper has produced interesting returns even in the most difficult environments, and Domtar expects it will keep on being a reliable and hugely cash generative business in the coming yrs. In Pulp, Domtar will focus on segments with the optimum progress profiles, such as the hygiene, tissue and towel marketplaces, and has the opportunity to further boost its efficiency by strategic investments.

USE OF PROCEEDS

Domtar is committed to retaining a resilient harmony sheet and returning significant cash to shareholders. With this sale, the Corporation options to use proceeds produced to:

Pay back Down Credit card debt: Domtar expects to reduce credit card debt by roughly $600 million. Domtar’s robust balance sheet and liquidity will place the Enterprise for resiliency and development.

Repurchase Shares: Domtar expects to repurchase around $300 million in shares via an accelerated share repurchase plan and open market repurchases.

TIMING AND APPROVALS

The transaction is subject matter to receipt of regulatory approvals and other customary closing situations and is predicted to close by the end of the 1st quarter 2021.

ADVISORS

Morgan Stanley & Co. LLC is acting as fiscal advisor and Debevoise & Plimpton LLP is performing as legal advisor to Domtar. Deutsche Financial institution Securities Inc. and Barclays are performing as financial advisors and Ropes & Grey LLP and Baker Botts LLP are performing as lawful advisors to AIP.

About Domtar

Domtar is a main supplier of a large wide variety of fiber-based mostly products and solutions which includes interaction, specialty and packaging papers, market pulp and absorbent cleanliness goods. With somewhere around 8,800 personnel serving additional than 50 international locations close to the environment, Domtar is pushed by a motivation to flip sustainable wood fiber into beneficial solutions that men and women count on just about every working day. Domtar’s annual revenue are approximately $5.2 billion, and its frequent stock is traded on the New York and Toronto Inventory Exchanges. Domtar’s principal govt business office is in Fort Mill, South Carolina. To understand a lot more, go to www.domtar.com.

About American Industrial Partners

American Industrial Partners is an operationally-oriented center industry private fairness organization that is distinctively concentrated on buying and bettering industrial enterprises with functions in the United States or Canada. The AIP group has deep roots in the industrial economic system and has been energetic in personal equity investing because 1989. AIP has concluded around 100 system and insert-on acquisitions and invests in all kinds of company divestitures, management buyouts, recapitalizations, and heading-personal transactions of founded businesses with revenues of $300 million to $1 billion+.

Forward-Looking Statements

Statements in this launch about our ideas, expectations and foreseeable future effectiveness, which include the statements by Mr. Williams, are “forward-hunting statements.” Ahead-seeking statements designed herein including, with out limitation, statements about the timing of the close of the sale of Domtar’s own treatment enterprise and the probable advantages of the sale, reflect the latest examination of existing details and are subject to many challenges and uncertainties. Genuine outcomes may perhaps differ materially from those instructed by these statements for a selection of reasons, such as our capacity to get hold of the essential regulatory approvals for the transaction, our skill to satisfy the other closing problems, our means to consummate the transaction on the anticipated timing, if at all, the COVID-19 pandemic and the ensuing reduce in paper revenue and the challenges we encounter in protecting production functions, improvements in shopper demand and pricing, variations in producing fees, foreseeable future acquisitions and divestitures, which includes facility closings, the failure to attain our expense containment aims, expenses of conversion in excess of our expectations, desire for linerboard, and the other factors identified beneath “Risk Factors” in our Sort 10-K for 2019 as filed with the SEC and as updated by subsequently filed Form 10-Qs. Except to the extent needed by legislation, we expressly disclaim any obligation to update or revise these forward-hunting statements to replicate new functions or instances or normally.

Perspective supply edition on businesswire.com:https://www.businesswire.com/news/property/20210108005266/en/

Make contact with: Trader RELATIONS

Nicholas Estrela

Director

Trader Relations

Tel.: 514-848-5049MEDIA RELATIONS

David Struhs

Vice-President

Company Providers and Sustainability

Tel.: 803-802-8031

Key phrase: UNITED STATES NORTH The usa CANADA SOUTH CAROLINA

Industry Key phrase: PACKAGING ENGINEERING Chemicals/PLASTICS FOREST Merchandise Producing Organic Assets OTHER Production

Resource: Domtar Company

Copyright Business Wire 2021.

PUB: 01/08/2021 07:36 AM/DISC: 01/08/2021 07:36 AM

http://www.businesswire.com/news/household/20210108005266/en

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