More changes in the forestry sector in Northwestern Ontario.
The Paper Excellence Group has entered into an agreement to acquire Resolute, which operates mills in Ignace, Atikokan and Thunder Bay.
This is the second big purchase in about a year for the B.C. based company as a deal to purchase Domtar, including the mill in Dryden, was completed last November.
The value of the Resolute acquisition is roughly 2.7 billion dollars, but will come in at about 1.6 billion when all is said and done.
Resolute Forest shareholders will receive $20.50 a share for each Resolute Forest stock they own.
Resolute Forest will continue to operate under the Resolute name once the deal is complete and the companies plan to retain Resolute’s production locations and current levels of jobs.
Stockholders are set to vote on the deal at a shareholder meeting in early fall.
Fairfax Financial Holdings Ltd., which holds some 40 per cent of Resolute Forest stock, has agreed to support the deal, which is expected to close in the first half of 2023.
Paper Excellence, a Richmond, B.C. company, also operates eight kraft and pulp mills in British Columbia, Saskatchewan and Nova Scotia.
Their Canadian facilities employ more than 3,000 with production of more 3 million tonnes in pulp, printing and writing, packaging, and specialty paper.
Patrick Loulou, vice chair and chief strategy officer of the Paper Excellence Group, commented, “We are excited to welcome Resolute and its employees to the Paper Excellence family. Resolute is an ideal fit for our long-term growth strategy. It complements our existing pulp, paper and packaging businesses and adds capabilities in lumber and tissue. We have seen firsthand that Resolute prides itself on its great people, strong assets and a culture of excellence going back more than two hundred years.”
Loulou adds, “This is a good example of how the Paper Excellence Group’s diversified business, financial resources, and technical capabilities can open up new strategic avenues for assets that may otherwise face an uncertain future. This is but one example of our support and intention to implement significant investments aligned with Resolute’s strategic plan for the future.”
Remi Lalonde, Resolute’s president and chief executive officer says, “With this transaction, Resolute will accelerate its growth as it gains access to more tools, capital and opportunities to pursue our ambitions with the combined resources of the Paper Excellence Group. This is good for employees and the communities where Resolute operates because we will continue to grow in a manner consistent with our core values of accountability, caring and trust that we hold dear. Together, we will form a stronger and more resilient, diversified forest products company, positioned to compete on a truly global scale, with a shared commitment to being a trusted business partner, dedicated to sustainability and to caring for its people and communities.”
Under the agreement Domtar will acquire all of the outstanding common shares of Resolute stock.