By P&PC Staff
By P&PC Staff
Domtar Corporation will sell its personal care business to American Industrial Partners (AIP) for $920 million.
The sale comes after the completion of a comprehensive strategic review the company started on Aug. 7.
“This transaction represents a milestone in Domtar’s ongoing portfolio transformation and further advances our strategic initiatives that will position Domtar for a sustainable and successful future,” says John D. Williams, president and chief executive officer of Domtar.
“We conducted a thorough review of strategic alternatives for Personal Care and believe the sale maximizes value to Domtar shareholders by allowing us to strengthen our balance sheet, enhance liquidity and buy back shares.
“The robust interest received reflects the excellent work by our team to improve profitability, gain new customers and enhance the operating structure and cost profile of the business. We are confident that AIP is the right owner to advance the business and look forward to working with them to execute a smooth and successful transition for the customers and employees of Personal Care.”
As a result of the sale, Domtar expects to reduce debt by approximately $600 million. The company also expects to repurchase approximately $300 million in shares through an accelerated share repurchase program and open market repurchases.
Williams says the company is making good progress on the conversion of its mill in Kingsport, Tennessee into a lightweight containerboard facility, which will be capable of producing approximately 600,000 tons of high-quality recycled linerboard and corrugated medium by the end of 2022.
The sale is expected to close by the end of the first quarter 2021.