A Canadian firm has purchased Domtar of Fort Mill, S.C., operator of a softwood and fluff pulp plant in Ashdown, for about $3 billion, all in cash.
Based in Richmond, British Columbia, Paper Excellence said it will operate Domtar as a "stand-alone business entity" with plans to keep Domtar's management team and its corporate and production locations in place. Paper Excellence also said it will retain the Domtar name.
The Domtar mill in Ashdown has been operating since 1968. With about 550 workers, it is one of Little River County's largest employers.
In August, Domtar shut down its paper machine in Ashdown, with about 110 workers losing their jobs as part of a company-wide reduction of about 800 jobs and cost-cutting of $200 million. The permanent shutdown of the paper machine followed the company's decision about four months earlier to idle it temporarily, in hopes that the market for paper would improve.
The covid-19 pandemic and resulting economic slowdown continued to negatively affect demand for communications paper grades, according to Domtar officials.
"Some recovery in demand for communications paper has occurred as the economy has started to reopen," Tammy Waters, a spokeswoman for the Ashdown mill, said in August. "But unfortunately, Domtar has not seen enough demand recovery to justify restarting operations on the A62 paper machine at the Ashdown Mill. Therefore, we have decided to permanently idle the A62 paper machine to maintain a balance between our production needs and our customer demand."
The Ashdown plant now produces only fluff pulp, which is used in the production of diapers and absorbent hygiene products.
Waters said Thursday that she couldn't speak to the prospects of the paper machine being restarted.
"We're focused on the announcement this week on the merger agreement," she said. "This agreement brings stability and a long-term commitment," Waters said.
Paper Excellence, a privately held company founded in 2007, makes pulp and specialty, printing, writing and packaging papers. It operates seven facilities in Canada, producing more than 2.8 million tons of paper each year with a workforce of 2,800, according to the company's website. The company said it has annual sales of $2.4 billion.
Paper Excellence will acquire all of the issued and outstanding shares of Domtar common stock for $55.50 per share. The deal is expected to close in the second half of this year, following the approval of Domtar shareholders and customary regulatory approval.
Domtar has 6,400 employees in 50 countries with annual sales of $3.7 billion. Its stock, traded on both the New York and Toronto exchanges, closed Thursday at $54.85, up from $48.30 per share on May 4, when company officials confirmed media reports of a possible merger or buyout involving Paper Excellence. Shares opened the year at $30.92.