Domtar Strikes Deal with AIP to Sell its Personal Care Unit

SEATTLE (Scrap Monster): Domtar Corporation announced that it has entered into a definitive agreement with American Industrial Partners (AIP) to sell its Personal Care business. The sale deal is worth $920 million.

The sale process marks the culmination of the process announced by the company in August this year to undertake a comprehensive strategic review of value-creating alternatives for the business. Through the sale, the company will focus on building an industry-leading Paper, Pulp and Packaging company, which will deliver long-term value to its shareholders, said the company press release.

ALSO READ: Domtar's Paper Shipments Surged 20% in Q3 2020

Commenting on the development, John D. Williams, President and Chief Executive Officer of Domtar noted that the transaction represents an important milestone in the company’s ongoing portfolio transformation and advancement of iys trategic initiatives. The sale will strengthen its balance sheet and enhance liquidity. AIP is the right owner to advance the business, he added.

The proceeds of the sale will be mainly used to reduce debt by $600 million and repurchase $300 million in shares.

The press release also noted that the company is making solid progress with the conversion of the Kingsport, Tennessee mill and the construction is set to officially begin at Kingsport in the second quarter of the current year.