Cascades Acquires Domtar's 50% Stake in Norampac for $560M

On December 29, 2006 Cascades Inc. completed the purchase of Domtar Inc.'s 50 per cent equity interest in Norampac Inc. for $560 million, becoming the sole shareholder of Norampac Inc. Cascades Inc. is a North American leader in the production, converting and marketing of packaging products, fine paper and tissue paper. Norampac Inc. is Canada's foremost manufacturer of linerboard and corrugated medium, and one of North America's leaders in corrugated products.

The acquisition was financed by Cascades Inc.'s public offering of 15,095,000 subscription receipts, for gross proceeds of approximately $200 million, by a concurrent private placement of 3,773,585 subscription receipts to the Caisse de dépôt et placement du Québec, for gross proceeds of $50 million, as well as from newly refinanced credit facilities in the amount of $850 million comprised of a $650 million revolving facility, a $100 million additional revolving facility and a $100 million term facility. The public offering was underwritten by a syndicate co-led by CIBC World Markets Inc., National Bank Financial Inc. and Scotia Capital Inc., and including BMO Nesbitt Burns Inc., Desjardins Securities Inc., RBC Dominion Securities Inc. and TD Securities Inc. The credit facilities have been made available by a banking syndicate co-led by National Bank Financial Inc., Scotia Capital and CIBC World Markets as co-lead arrangers, with National Bank of Canada and The Bank of Nova Scotia acting as co-administrative agents, CIBC World Markets acting as syndication agent and Caisse centrale Desjardins and Caisse de dépôt et placement du Québec acting as co-documentation agents.

Cascades Inc. was represented by vice-president legal affairs and corporate secretary Robert Hall and legal counsel and assistant secretary Louise Paul and by Fraser Milner Casgrain LLP for both the acquisition and equity financing aspects of the transaction. The FMC team included Charles Spector, Neil Katz, Maxime Cloutier, Philipp Park and Sacha Haque (M&A) and Vitale Santoro, Christopher Main and Jonathan Halwagi (securities). Cascades Inc. was also represented by Marc Novello, Martin Racicot, Andrew Klug, Thomas Meagher (Toronto) and Olivia Colic (Calgary) of Fasken Martineau DuMoulin LLP with regard to the refinancing of its credit facilities. Jones Day LLP acted as US counsel to Cascades Inc., with a team that included Stephen Hall, Leslie Schafer, J. Barrett Ellis, Phillipp von Raven and Gaël Saint Olive, with regard to the refinancing of the credit facilities, as well as Meredith Deutsch and Micah Nessan with regard to the equity financing. Richard Epstein of BCF LLP also advised Cascades Inc. with regard to certain competition matters. Domtar Inc. was represented by Gilles Pharand, senior vice-president, corporate affairs and general counsel and Guy Boucher, vice-president, legal and environmental affairs and by Ogilvy Renault LLP with a team that included Norman Steinberg, Sara Joli-Coeur, Afroditi Ladovrechis and Karine Fadous. The co-administrative agents and the lenders were represented by Michel Deschamps, Louis-Martin Dubé, Richard O'Doherty and Anne-Marie Durand of McCarthy Tétrault LLP. The underwriters were also represented by McCarthy Tétrault LLP with a team that included Jean-René Gauthier, Karl Tabbakh and Stephanie Lee. Caisse de dépôt et placement du Québec was represented by Jean Marc Huot of Stikeman Elliott LLP.