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Domtar Corporation has announced the termination of its cash tender offers related to its 6.25% Senior Notes due 2042 and 6.75% Senior Notes due 2044. This decision comes from Karta Halten B.V. and its subsidiary, Pearl Merger Sub Inc., citing unfavorable market conditions. Concurrently, Domtar ended its consent solicitations to amend the indenture for these notes. All tendered notes will be returned to holders, with no payments made. Future offers may be considered if market conditions improve.
On August 23, 2021, Karta Halten B.V. announced the extension of tender offers for Domtar's 2042 and 2044 Senior Notes, increasing the Total Tender Offer Consideration to $1,020.00 per $1,000 principal amount. The Early Tender Payment has also been raised to $57.50. The Early Tender Deadline and Withdrawal Deadline have been extended to August 27, 2021. Domtar concurrently announced an increase in the consent payment for its notes from $2.50 to $10.00. As of August 20, 2021, approximately $57.5 million of 2042 Notes and $43.6 million of 2044 Notes have been tendered, with notable consent delivery for both series.
Karta Halten B.V. has initiated offers to purchase Domtar's outstanding senior notes, totaling $500 million. This includes 6.25% Senior Notes due 2042 and 6.75% Senior Notes due 2044. Concurrently, Domtar is soliciting consent from noteholders to amend covenants associated with these notes. These actions are part of the pending acquisition by Paper Excellence, set to close in Q4 2021, but subject to potential extensions. Holders may not receive payments promptly after tendering, as it is contingent upon the merger's completion.
Domtar Corporation (NYSE: UFS) stockholders have approved a merger with Paper Excellence B.V., where Karta Halten B.V. will acquire Domtar for $55.50 per share in cash. Over 81% of votes favored the merger at the special meeting. The merger received necessary antitrust clearances in the U.S., Spain, and China, with pending clearance under Canada's Competition Act. The transaction is anticipated to finalize before the end of 2021, enhancing Domtar's market position in the fiber-based products sector, which generates approximately $3.7 billion in annual sales.
Domtar Corporation (NYSE: UFS) has announced the restart of a paper machine at its Ashdown, Arkansas mill to meet rising customer demand. The machine is expected to operate fully by January 2022, adding 185,000 tons of uncoated freesheet capacity. The initiative aims to strengthen Domtar’s market leadership in North America and enhance customer service. The restart involves an estimated cost of $10 million. Additionally, part of the increased capacity may support thermal coated paper production in West Carrollton, Ohio. The Ashdown Mill's fluff pulp production remains unaffected.
Paper Excellence has secured a $1.95 billion financing commitment from leading financial institutions to facilitate its acquisition of Domtar (NYSE: UFS). The financing includes a $400 million revolving facility, a $775 million term loan, and a $775 million bridge facility. The acquisition will see Paper Excellence pay $55.50 per share for Domtar's common stock. The closing is expected in the second half of this year, pending shareholder and regulatory approvals.
Domtar Corporation (NYSE: UFS) has announced an expansion of its Engineered Absorbent Materials (EAM) facility in Jesup, Georgia. This move aims to strengthen the company’s position in the global absorbent materials market, focusing on fluff pulp and airlaid nonwoven materials. The expansion will introduce a large-scale Dan-Web airlaid production line, expected to be operational in 2022, enhancing supply capabilities for both domestic and international customers. Domtar's annual sales stand at approximately $3.7 billion, underscoring its status as a leading fiber-based products provider.
Paper Excellence has announced its acquisition of Domtar (NYSE: UFS) for $55.50 per share, totaling an enterprise value of approximately $3.0 billion. This price reflects a 37% premium over Domtar's closing price on May 3, 2021. Following the acquisition, Domtar will operate as a standalone entity, retaining its management and locations. The deal is part of Paper Excellence's strategy to expand into the American market and enhance growth. The transaction awaits shareholder and regulatory approvals, expected to finalize in the second half of 2021.
Domtar Corporation (NYSE: UFS) reported a net loss of $29 million ($0.54 per share) for Q1 2021, an improvement from a $59 million loss in Q4 2020. Sales reached $944 million. The results include a $22 million loss from discontinued operations due to the sale of the Personal Care Business. However, earnings from continuing operations were $5 million ($0.09 per share), compared to a loss of $15 million a year prior. The company expects strong performance in the second half of 2021, aided by price momentum in paper and pulp and progress on operational projects.
Domtar (NYSE: UFS) has acknowledged media speculation regarding potential discussions with Paper Excellence for a possible business combination or acquisition. The management confirmed that they are in talks, but no agreement has been reached yet. Domtar stated their intention to refrain from further comments unless there is a definitive transaction to report. The company, with annual sales of approximately $3.7 billion and a workforce of around 6,600 employees, continues to focus on providing a variety of fiber-based products globally.
