Paper Excellence Welcomes Resolute Into Its Family of Companies

Rhea-AI Summary

The Paper Excellence Group, through its subsidiary Domtar Corporation, has successfully acquired Resolute Forest Products Inc. (NYSE: RFP). This strategic acquisition aims to create a more resilient forest products company, expanding its range of pulp products, specialty papers, and lumber manufacturing. Stockholders of Resolute will receive $20.50 per share and a contingent value right related to potential softwood lumber duty deposit refunds of approximately $500 million. The acquisition enhances the Group's scale and operational capabilities, positioning it favorably within the North American market, particularly amidst a housing supply shortage.

Positive

• Acquisition of Resolute strengthens Paper Excellence's product offering and market reach.
• Stockholders receive $20.50 per share, enhancing shareholder value.
• New products and competitive lumber capacity will address North America's housing stock shortage.

Negative

• None.

(All financial information is in U.S. Dollars)

RICHMOND, BC, March 1, 2023 /PRNewswire/ - The Paper Excellence Group (the "Group"), through its wholly-owned subsidiary Domtar Corporation ("Domtar"), today announced the successful closing of its previously announced acquisition of Resolute Forest Products Inc. ("Resolute") (NYSE: RFP) (TSX: RFP). Today's acquisition creates a stronger and more resilient diversified forest products company, manufacturing a range of pulp products and specialty, printing, writing, and packaging papers, as well as lumber and tissue. The acquisition of Domtar in 2021 and Resolute today significantly increases the Group's scale, overall product offering and geographic reach.

"We are thrilled to welcome Resolute into the Paper Excellence Group. Resolute's business is complementary to our own. It introduces new products to our offering and allows us to welcome an impressive workforce, strengthening our existing team. We are well positioned with the addition of competitive lumber capacity at a time of significant shortage in housing stock throughout North America," stated Patrick Loulou, Vice Chairman and Chief Strategy Officer of the Paper Excellence Group. "Resolute has shown that it shares our values and high standards related to the environment, our communities, and our people."

"Together we are creating a stronger player in the global marketplace. We look forward to collaborating with our new colleagues, generating long-term value and driving sustainable economic activity in the communities where we operate," said Remi G. Lalonde, Resolute's President and Chief Executive Officer. "The combined company will adopt best practices, sharing a common goal of sustainability leadership, and meaningful community engagement and partnerships, including with Indigenous communities."

Under the terms of the agreement, Resolute stockholders are receiving $20.50 for each share of the Resolute common stock. They also receive one contingent value right ("CVR") per share (on a fully diluted basis) entitling the holder to a share of potential future softwood lumber duty deposit refunds on about $500 million of deposits paid by Resolute. Resolute common stock will cease to be listed on the New York Stock Exchange and the Toronto Stock Exchange.

Advisors
Barclays served as exclusive financial advisor to Paper Excellence, and Latham & Watkins LLP, McMillan LLP, McCarthy Tétrault LLP, and Mehigan LLP served as legal advisors.

CIBC Capital Markets served as exclusive financial advisor to Resolute, and Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Stikeman Elliott LLP served as its legal advisors.

Financing
Barclays, CoBank, and Bank of Montreal provided financing to Domtar in connection with the transaction.

About Paper Excellence Group
The Paper Excellence Group is a privately held diversified manufacturer of pulp and specialty, printing and writing, and packaging papers, producing over 7 million tons annually with a workforce of over 10,000 in its nearly 40 locations across the Americas and Europe. Through its individual business units, the Group leverages its operational excellence and sustainable high-quality, cost-effective products to deliver high quality pulp and paper to its customers around the world. For more information on Paper Excellence, please visit www.paperexcellence.com. To learn more about Resolute Forest Products, visit www.resolutefp.com.

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SOURCE Paper Excellence Group

FAQ

What is the impact of the acquisition of Resolute Forest Products on RFP stock?

The acquisition is expected to enhance RFP's market position and shareholder value by expanding its product range and operational scale.

When was the acquisition of Resolute Forest Products completed?

The acquisition was completed on March 1, 2023.

What compensation did Resolute stockholders receive in the acquisition?

Resolute stockholders received $20.50 per share and a contingent value right related to potential future softwood lumber duty deposit refunds.

What are the future implications of the Paper Excellence Group's acquisition of Resolute for RFP?

The acquisition positions RFP for long-term growth and value creation, particularly in addressing the current lumber supply shortage.

How does the acquisition affect RFP's product offerings?

The acquisition expands RFP's product offerings to include a wider range of pulp products, specialty papers, and lumber.