Business
EACOM Timber Corporation Completes Acquisition of Domtar's Forest Products Business
EACOM Timber Corporation Completes Acquisition of Domtar's Forest Products Business
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[{"type":"text","content":"\n\n\n\n Jul. 1, 2010 (Canada NewsWire Group) -- VANCOUVER and MONTREAL, July 1 /CNW Telbec/ - EACOM Timber Corporation (TSX VENTURE: ETR; "EACOM") is pleased to announce that it has completed the acquisition of the Forest Products business of Domtar Corporation. The purchase was funded out of the previously announced $145 million private placement.\n\nThe Acquisition\n\nEACOM has acquired 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 included 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 was approximately $127 million (including working capital of approximately $47 million). The consideration paid to Domtar is comprised of approximately $102 million in cash and 48,070,712 common shares of EACOM valued at approximately $27 million, based on the June 30 closing price for EACOM shares. Domtar's ownership interest in EACOM post transaction and financing will be 11.74%.\nAs part of the transaction, Domtar Corporation has selected Patrick Loulou, Senior Vice-President of Corporate Development, Domtar Corporation, to be a director on EACOM's Board. EACOM intends to confirm this appointment at its board meeting on July 5, 2010.\nThe 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.\n"We are very proud of this acquisition as it allows us to continue to pursue 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.\n"We are pleased to welcome ...