Domtar Corp. (UFS,UFS.TO) said Friday it has agreed to sell its Personal Care to private equity firm American Industrial Partners or AIP for $920 million. Domtar is a provider of fiber-based products, including communication, specialty and packaging papers, market pulp and absorbent hygiene products.
Domtar noted that the sale of its Personal Care business marks the culmination of a process announced by the company in August 2020, during which it undertook a comprehensive strategic review of value-creating alternatives for the business. The company expects the transaction to close by the end of the first quarter 2021.
Following the sale, Domtar will intensify its focus on building an industry-leading Paper, Pulp and Packaging company to deliver long-term shareholder value.
Domtar has started to execute its strategic plan to enter the containerboard market with highly competitive assets and a differentiated go-to-market strategy.
The company noted that the Kingsport conversion provides it with a strategic entry point to build an up to 2.5 million ton business and become a long-term strategic supplier to the packaging industry.
Domtar plans to use proceeds from the sale of the Personal Care business to reduce its debt by about $600 million and to repurchase about $300 million in shares through an accelerated share repurchase program as well as open market repurchases.
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