March 30, 2010 (FinancialWire) — EACOM Timber Corp. (TSX Venture: ETR) (OTC: ETRFF) said it has entered into a definitive purchase agreement to acquire the Forest Products business of Domtar Corp. (NYSE: UFS). The purchase will be funded out of a $145 million private placement, which has closed in escrow pending completion of the acquisition.

Under a definitive purchase agreement EACOM will acquire seven sawmills and an equity interest in an eighth sawmill, all located in Eastern Canada.

The mills are Timmins, Nairn Centre, Gogama and Ear Falls in Ontario and Val-d'Or, Ste-Marie and Matagami in Quebec. The equity interest is in the Elk Lake sawmill located in Ontario. The assets will include the transfer or grant of tenures to enable production at the mills. The sawmills in Ear Falls, Ontario, and Ste-Marie, Quebec, are currently idled.

According to EACOM, the acquisition price is set at $80 million plus the value of working capital acquired, estimated to be between $30 million to $40 million. 19% of the purchase price will be paid to Domtar as shares of EACOM.

The acquisition is scheduled to be finalized at the end of June, at which time Domtar will appoint a director to EACOM's board.

EACOM has raised $145 million in a private placement subscription receipt financing. The financing was completed at $0.50 per subscription receipt. The subscription receipts will convert into common shares of EACOM on a one for one basis upon completion of the transaction.

Canada-based EACOM Timber is a new entry into the forestry sector. EACOM currently owns one idle mill in Big River Saskatchewan, which it acquired at the beginning of 2010.

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