Domtar Corporation yesterday announced that it has entered into an agreement to sell its forest products business to EACOM Timber Corporation for CDN$80 million plus elements of working capital estimated at CDN$30 to CDN$40 million. Domtar will receive 19% of the proceeds in shares of EACOM. The transaction is expected to close at the end of the second quarter of 2010, subject to material consents and customary closing conditions.
"Our forest products employees have demonstrated tremendous resilience throughout the years. Their sustained efforts to reduce costs and pursue the continuous improvement of operations have positioned the business well for the recovery," said John D. Williams, President and Chief Executive Officer of Domtar Corporation.
Mr. Williams added, "All Domtar forest products employees, and its management team currently led by Jean-François Mérette, will be transitioning to EACOM. EACOM will establish its headquarters in Montreal, QC and will become one of the largest publicly-traded lumber producers in Eastern Canada. The company will be a focused, well capitalized, standalone operation dedicated to the manufacturing of solid and value-added wood products."
