Xerox Sells North American Paper Business to Domtar

Xerox sold its paper and print media products business in Canada and the United States to North American paper giant Domtar Corporation at an undisclosed price. Domtar said it is buying Xerox’s branded papers and specialty products, but refused to provide any other details, except that it would be a cash deal.

Xerox said it decided to sell the paper business to an industry leader as it focuses more on services and document technology. The sale is expected to close in the second quarter of 2013, subject to normal closing conditions.

As was revealed by Xerox spokesman John Quinn, the sale will have an impact on about 75 Xerox employees across North America, including 20 to 25 sales and support workers located primarily in Toronto. The process to determine how many will become part of Domtar’s operations has already started. After the deal closes, 90% of the paper will be produced by Domtar, while 10% of very low-volume specialty papers are under evaluation.

$275 million (USD) worth of paper is sold by Xerox annually at very low margins, including a range of coated and uncoated grades, and specialty products including business forms and wide-format papers. Regarding other consumables, Xerox will continue to manufacture and sell toner, ink and Xerox replacement cartridges.

Known mainly for digital printers and photocopiers, Xerox doesn’t make its branded paper but uses a number of producers across North America including Domtar, International Paper and Mohawk.

Domtar CEO John Williams observed that the Xerox brand is well regarded in the markets it serves. “This deal brings together Xerox’s branded papers with Domtar’s already comprehensive paper offerings and will allow us to better serve our customers,” said Williams in a news release.