| ITEM 1.01 | Entry Into A Material Definitive Agreement |
On May 11, 2022 Domtar Inc., a wholly-owned subsidiary of Domtar Corporation (the “Company”) entered into a Share Purchase Agreement with Kruger Kamloops Pulp L.P and Kruger Specialty Papers Holding L.P (the “Purchaser”) to sell the Company’s Kamloops, BC mill and related assets to the Purchaser for a purchase price of $300 million in cash, subect to customary adjustments (the “Transaction”). The Transaction is subject to customary closing conditions, including regulatory approval in Canada. Subject to the satisfaction or waiver of conditions of the Share Purchase Agreement, the transaction is expected to close in the second quarter of 2022.
The Share Purchase Agreement contains representations, warranties and covenants that are customary for similar transactions. The Share Purchase Agreement contains customary termination rights, including if the closing has not accurred on or prior to May 31, 2022.
The foregoing description of the Share Purchase Agreement and the transactions comtemplated thereby does not purport to be complete and is subect to, and qualified in its entirety by, the full text of the Share Purchase Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
At the closing of the Transaction, the parties will enter into certain ancillary agreements, including a transition services agreement.
| ITEM 7.01 | Regulation FD Disclosure. |
On May 12, 2022, Paper Excellence published a press release announcing the Transaction. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Statements in this report about our plans, expectations and future performance are “forward-looking statements”. Forward-looking statements including, without limitation, statements regarding the timing of the close of the sale of Domtar’s Kamloops mill and the potential benefits of the sale, reflect the current analysis of existing information and are subject to various risks and uncertainties. Actual results may differ materially from those suggested by these statements for a number of reasons, including our ability to obtain the required regulatory approvals for the transactions, our ability to satisfy the other closing conditions, our ability to consummate the transaction on the anticipated timing, if at all, the COVID-19 pandemic and the resulting decrease in paper sales and the challenges we face in maintaining manufacturing operations, change in customer demand and pricing, changes in manufacturing costs, future acquisitions and divestitures, including facility closings, the failure to achieve our cost containment goals, costs of conversion in excess of our expectations, demand for linerboard, and the other reasons identified under “Risk Factors” in our Form 10-K for 2021 as filed with the SEC. Except to the extent required by law, we expressly disclaim any obligation to update or revise these forward-looking statements to reflect new events or circumstances or otherwise.
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