FORT MILL, SC & RICHMOND, British Columbia – (BUSINESS WIRE) – October 1, 2021–
Domtar Corporation (“Domtar”), a leading supplier of a wide variety of fiber-based products, including communications, specialty and packaging papers, market pulp and airlaid nonwovens, and Karta Halten BV, a limited liability company incorporated under the laws of the Netherlands (“Karta Halten”) and a subsidiary of Paper Excellence BV, a limited liability company incorporated under the laws of the Netherlands (“Paper Excellence ), Through its subsidiary, Pearl Merger Sub Inc., a Delaware corporation (“Merger Sub”), evaluated its previously announced offer to eligible buyers for a total principal amount of $ 775.0 million. dollars of 6.750% Senior Secured Notes due 2028 (the “Notes”). The Notes will mature on October 1, 2028, with interest payment dates on April 1 and October 1 in each year, effective April 1, 2022. The offering is exempt from the registration requirements of the Securities Act of 1933 , as amended (the “Securities Act”). The Notes will be issued at a price of 100% of their aggregate principal. The issuance and sale of the Notes is expected to close around October 18, 2021, subject to customary closing conditions.
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The placement is part of the financing and is conditional on completion of the proposed acquisition of Domtar and its subsidiaries by Karta Halten. Merger Sub was formed for the sole purpose of completing the Acquisition and, upon closing of the Acquisition, will be merged with and into Domtar (the “Merger”), Domtar surviving the amalgamation and becoming the issuer of the Notes. As previously announced, Domtar, Karta Halten, Merger Sub, Paper Excellence and Hervey Investments BV, a Dutch limited liability company, entered into a merger agreement and plan on May 10, 2021 (the “Merger Agreement”) .
The net proceeds of the Offering will be used, together with an equity investment, borrowings under new senior secured credit facilities and, following completion of the Merger, cash on Domtar’s balance sheet, to (i) pay the counterparty. in cash in connection with the Merger, (ii) redeem the 6.25% Domtar Senior Notes due 2042 and the 6.75% Senior Notes due 2044 (the “Existing Domtar Notes” ), if applicable, filed for reimbursement in connection with the change of control offers for the existing Domtar Notes to be made by Domtar after the closing of the Merger), (iii) pay the fees, costs and expenses associated with the merger and related operations and (iv) deposit cash on the balance sheet.
If the Offering is closed prior to the completion of the Merger, the Initial Purchasers will deposit the gross proceeds from the sale of the Notes into an escrow account. In the event that (i) the Merger is not completed by May 18, 2022 (the “External Date”), (ii) Merger Sub notifies the Escrow Agent and the Note Trustee in writing that the Merger Agreement terminated before the outer date or (iii) the Merger Subcontractor advises the Escrow Agent that, in its reasonable judgment, the Merger will not be completed on the outer date, the Notes will be subject to a special mandatory redemption, at a price equal to 100% of the initial issue price of the Notes plus accrued and unpaid interest from the date of issue of the Notes up to, but not including, the date of this obligatory redemption special.
Upon completion of the Merger, the Notes will be fully and unconditionally guaranteed (collectively, the “Guarantees”), jointly and severally, on a senior guarantee basis by Pearl Excellence Holdco LP, a Delaware limited partnership, and each of the existing companies and future restricted domestic subsidiaries that are guarantors under Domtar’s new term credit agreement.
The Securities and associated Guarantees will be offered only to institutional buyers qualified under Rule 144A of the Securities Act, and to non-US persons in connection with transactions outside the United States under Regulation S of the Securities Act. . The Notes have not been and will not be registered under the Securities Act and may not be offered or sold in the United States absent an applicable registration or exemption or in connection with a transaction. not subject to the registration requirements of the Securities Act. and other applicable securities laws.
This press release does not constitute and will not constitute an offer to sell, or the solicitation of an offer to buy, the tickets or any other title, and there will be no sale of the tickets or other securities, in a state or other jurisdiction in which such offer, sale or solicitation would be illegal. Any offer will be made only by means of a private offering memorandum.
About the excellence of paper
Paper Excellence, a limited liability company organized under the laws of the Netherlands, is a diversified manufacturer of pulp and paper, including printing and writing, packaging and specialty papers. Paper Excellence believes in the sustainable value of wood-based products in global markets and has built an extensive network of factories and shredding plants to produce them competitively. Through its distinct approach to operational excellence, Paper Excellence provides high quality and cost effective products to international customers. Paper Excellence has grown through logical acquisitions, growing from a single mill to a group producing 2.8 million tonnes of paper and pulp and employing more than 2,800 people over the past decade.
Additional information on Paper Excellence is available at https://paperexcellence.com/.
Domtar is a leading supplier of a wide variety of fiber products, including communications, specialty and packaging papers, market pulp and airlaid nonwovens. With approximately 6,400 employees serving more than 50 countries around the world, Domtar is driven by a commitment to transform sustainable wood fiber into useful products that people rely on every day. Domtar’s annual sales are approximately $ 3.7 billion and its common shares are traded on the New York and Toronto stock exchanges. Domtar’s main executive office is located in Fort Mill, South Carolina. To learn more, visit www.domtar.com.
All statements made here that are not historical facts should be considered as forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors which may cause materially different actual results. . These statements include, but are not limited to, statements regarding the expected completion and timing of the proposed transaction between Paper Excellence and Domtar, the anticipated benefits and costs of the proposed transaction, and management plans relating to the transaction. proposed, statements that address expected future business and financial performance, statements regarding the impact of natural disasters, health epidemics and other epidemics, in particular the COVID-19 outbreak since December 2019, which may have an impact material adverse effect on the business, results of operations and financial condition of each business, and other statements identified by words such as “anticipate”, “believe”, “expect”, “intend de ”,“ aim ”,“ target ”,“ plan ”,“ continue ”,“ estimate ”,“ plan ”,“ ”can”, “will”, “should” and similar expressions. These forward-looking statements should be viewed with the understanding that such statements involve a variety of risks and uncertainties, known and unknown, and may be affected by inaccurate assumptions. Therefore, no forward-looking statement can be guaranteed and actual results may vary significantly. There are many risks, contingencies and uncertainties that could cause actual results to differ materially from our forward-looking statements. Some of these risks are set out in Domtar’s annual report on Form 10-K for the year ended December 31, 2020, as well as in the Company’s other reports filed with the SEC.
These risks, uncertainties and assumptions also include the timing, receipt and terms of any government and regulatory approval required of the proposed transaction between Paper Excellence and Domtar which could reduce the anticipated benefits or cause the parties to abandon the proposed transaction, the occurrence any event, change or other circumstances that could lead to the termination of the merger agreement, the risk that the parties will not be able to meet the conditions of the proposed transaction in time or not at all, the risks associated with the disruption the time management of ongoing business transactions as a result of the proposed transaction, the risk that any announcement relating to the proposed transaction could adversely affect the price of Domtar common shares, the risk of unforeseen costs or expenses resulting from the proposed transaction, the risk of any litigation relating to the proposed transaction ée, the risk that the proposed transaction and its announcement could have an adverse effect on the ability of Paper Excellence or Domtar to retain their customers and retain and hire key personnel and maintain relationships with their suppliers, customers and others. business relationships and on their operating results and activities in general, the risk that the pending proposed transaction could distract the management of both entities and they will incur substantial costs, the risk that the combined company will not operate as efficiently than expected and other significant factors that could cause actual results to differ materially from those projected. All of these factors are difficult to predict and are beyond the control of every business.
Additional factors that could cause results to differ materially from those described above can be found in Domtar’s annual report on Form 10-K for the year ended December 31, 2020, as well as in other reports from the company filed with the SEC.
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SOURCE: Domtar Corporation
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PUB: 01/10/2021 17:48 / DISC: 01/1021 17:48