Mercer International Inc.  today announced that it has entered into an agreement with Marubeni Corporation, Nippon Paper Industries Co., Ltd., and Daishowa North America Corporation to acquire all of the issued and outstanding shares of DMI for consideration of $359.2 million (C$465 million), which includes minimum working capital of $85.7 million (C$111 million).

DMI owns 100% of a bleached kraft pulp mill in Peace River, Alberta (the "PRP Mill") and has a 50% interest
in the Cariboo Pulp and Paper Company ("CPP"), a joint venture which operates a bleached kraft pulp mill
in Quesnel, British Columbia (the "CPP Mill").

As a result of this transaction, Mercer's annual production capacity for pulp will increase by approximately
41% to 2.2 million ADMTs, and surplus energy will increase by approximately 8% to 890,000 MWhs.

Further, the acquisition of DMI will add NBHK pulp to Mercer's current product mix as well as provide the
Company with an expanded market presence in Asia.

DMI also holds 20-year term renewable governmental Forest Management Agreements and Deciduous
Timber Allocations in Alberta with an Annual Allowable Cut ("AAC") of approximately 2.4 million cubic
meters of hardwood and 400,000 cubic meters of softwood.

The transaction is subject to customary closing conditions, including receipt of requisite regulatory antitrust approvals. In connection therewith, Mercer has arranged a fully committed financing in the amount of US$350 million to finance the acquisition. The transaction is expected to close in the fourth quarter of 2018.

Sangra Moller LLP acted as legal advisor for Mercer and Credit Suisse provided the committed financing for
the transaction

 

Source: mercerint.com

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