Business
EACOM Timber Corporation Acquires Domtar's Forest Products Business and Raises $145 Million in Equity Financing
EACOM Timber Corporation Acquires Domtar's Forest Products Business and Raises $145 Million in Eq...
About this update from Etruscus Resources Corp.
[{"type":"text","content":"\n\n\n\nVANCOUVER, and MONTREAL, Mar. 29, 2010 (Canada NewsWire Group) -- /CNW Telbec/ -- EACOM Timber Corporation (TSX VENTURE: ETR; \"EACOM\") is pleased to announce that it has entered into a definitive purchase agreement to acquire the Forest Products business of Domtar Corporation. The purchase will be funded out of a $145 million private placement which has closed in escrow pending completion of the acquisition.The AcquisitionUnder the definitive purchase agreement EACOM will acquire seven sawmills and an equity interest in an eighth sawmill, all located in Eastern Canada. The mills are Timmins, Nairn Centre, Gogama and Ear Falls in Ontario and Val-d'Or, Ste-Marie and Matagami in Quebec. The equity interest is in the Elk Lake sawmill located in Ontario. The assets will include the transfer or grant of tenures to enable production at the mills. The sawmills in Ear Falls, Ontario, and Ste-Marie, Quebec, are currently idled. The acquisition price is set at $80 million plus the value of working capital acquired, estimated to be between $30 million to $40 million. 19% of the purchase price will be paid to Domtar as shares of EACOM. The acquisition is expected to be finalized at the end of June 2010, at which time Domtar will appoint a director to EACOM's board. The transfer is subject to obtaining certain consents, including the transfer of timber allocations and other standard conditions.The sawmills transferred as part of the transaction represent approximately 3.5 million cubic metres of annual logging rights and a production capacity of close to 900 million board feet. Also included in the transaction are the Sullivan remanufacturing facility in Quebec and Domtar's investment in Anthony-Domtar Inc..\"With this acquisition, we are pursuing our vision to become a leading producer of softwood lumber for global markets,\" stated Rick Doman, President and Chief Executive Officer of EACOM Timber Corporation. \"We are aware that customers in the wood products sector have many producers to choose from, and we will work very hard to ensure they do business with us, particularly given our ongoing commitment to our FSC certification,\" he continued.\"We can also confirm that all of the employees in Domtar's Forest Products division, as well as the members of the management team led by Jean-François Mérette, will be transitio...