Domtar Consolidates its Ownership of the Attends Brand With an Acquisition in Europe

MONTREAL, January 26, 2012 /PRNewswire/ --

(All financial information is in Euro, unless otherwise noted.)

• Purchase price of €180 million including debt
• World-class manufacturing, research and development and distribution facility in Aneby, Sweden
• Acquired business has annual run rate sales of €140 million and sales organizations in nine European countries

Domtar Corporation (NYSE: UFS) (TSX: UFS) today announced the signing of a definitive agreement for the acquisition of privately-held Attends Healthcare Limited ("Attends Europe"), manufacturer and supplier of adult incontinence care products in Europe, from Rutland Partners for €180 million. The closing of the transaction is expected during the first quarter of 2012, subject to customary closing conditions.

"The acquisition of Attends Europe moves us further along the path we started down last summer and it consolidates our ownership of the Attends brand on both sides of the Atlantic. With this acquisition, we are adding another platform for growth with a well-established business that has the critical mass to drive product development and brand growth with our current North American business," said John D. Williams, President and Chief Executive Officer of Domtar. "Demand for incontinence care products in Europe is strong, and our intent is to double earnings within the next five years."

Attends Europe sells and markets a complete line of branded and private-label adult incontinence care products. The company distributes its products in several channels with its own sales organizations in nine European countries. Attends Europe operates a world-class 374,000 square foot (34,000 square meter) manufacturing facility with eight production lines; a research and development center and a distribution center in Aneby, Sweden; it also operates distribution centers in Scotland and Germany. Attends has 413 employees, estimated annual run rate sales and EBITDA of €140 million and €23 million respectively.

James Steele currently Chief Executive Officer of Attends Healthcare Limited will continue in his functions. The acquired business will be integrated in the Personal Care segment of Domtar's financial information filed to the Securities and Exchange Commission. Domtar will use cash on hand to pay for the acquisition and intends to redeem most of Attends Europe's outstanding debt upon closing of the transaction.

About Domtar

Domtar Corporation (NYSE: UFS) (TSX: UFS) is the largest integrated manufacturer and marketer of uncoated freesheet paper in North America and the second largest in the world based on production capacity, and is also a manufacturer of papergrade, fluff and specialty pulp. The Company designs, manufactures, markets and distributes a wide range of business, commercial printing and publishing as well as converting and specialty papers including recognized brands such as Cougar^®, Lynx^® Opaque Ultra, Husky^® Opaque Offset, First Choice^® and Domtar EarthChoice^® Office Paper, part of a family of environmentally and socially responsible papers. Domtar also produces a complete line of incontinence care products and distributes washcloths marketed primarily under the Attends^® brand name. Domtar owns and operates Ariva^[TM], an extensive network of strategically located paper distribution facilities. The Company employs approximately 8,800 people. To learn more, visit http://www.domtar.com.

Forward-Looking Statements

All statements in this news release that are not based on historical fact are "forward-looking statements." While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under the captions "Forward-Looking Statements" and "Risk Factors" of the latest Form 10-K filed with the SEC as periodically updated by subsequently filed Form 10-Q's. Unless specifically required by law, we assume no obligation to update or revise these forward-looking statements to reflect new events or circumstances.

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SOURCE Domtar Corporation