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Kruger to Acquire Kamloops Pulp Mill in Canada
Friday 13 May 2022

Montreal, Canada-based paper maker Kruger's affiliate, Kruger Specialty Papers Holding L.P., has entered into a definitive share purchase agreement pursuant to which one of its wholly-owned subsidiaries will purchase all the issued and outstanding shares in the capital of DKP Pulp ULC, a legal entity wholly-owned by Domtar Inc. that will, at the time of closing, own and operate the Kamloops Mill located at 2005 Mission Flats Road, Kamloops, British Columbia, the company said.

The Kamloops Mill produces Northern Bleached Softwood Kraft pulp and unbleached softwood Kraft for customers in North America and Asia.

Closing of the transaction contemplated by the Purchase Agreement is expected to occur in 2Q22 and is subject to customary conditions, including the approval of the Commissioner of Competition.

The Paper Excellence Group, in the context of its acquisition of Domtar Corp. in November 2021, had agreed with the Commissioner to sell Domtar's pulp mill in Kamloops, British Columbia.

This acquisition will enable Kruger to secure the supply of high-quality pulp for some of its Québec paper mills.

As a reminder, the company, which has 2,700 employees in Québec, is investing about USD 1bn in Sherbrooke, Québec, for the construction of two state-of-the-art tissue plants.

Also, with this acquisition, Kruger will strengthen its presence in British Columbia as a major employer and provider of essential products.

Taking into account its existing operations, namely the Kruger Products tissue plant, in New Westminster, and Kruger Energy's Zeballos Lake Hydro Plant, the company will have nearly 700 employees in B.C.

Scotiabank is acting as exclusive financial advisor to Kruger in the context of this acquisition with McCarthy Tétrault LLP acting as legal advisors.

Founded in Canada in 1904, Kruger Inc. is a provider of tissue products; 100% recycled containerboard; corrugated packaging; publication papers; specialty papers; renewable energy; cellulosic biomaterials; and wines and spirits.

The company is also a leader in paper and paperboard recycling in North America. A privately held family company, Kruger Inc. has 5,500 employees and its facilities are located in Québec, Ontario, British Columbia, and Newfoundland and Labrador, as well as in the States of Tennessee, Maine, New York, Virginia, Kentucky and Rhode Island.
Date Published: 13/05/2022