International Paper is to sell its kraft papers business to Stone Arcade Acquisition Corp for $155M. The business, which generated sales of $220M in 2005, includes the Roanoke Rapids, NC, paper mill and the Ride Rite dunnage bag plant in Fordyce, Ark. It produces approximately 400,000t of kraft papers and employs approximately 700 people.
The deal is part of IP’s transformation plan to focus on uncoated papers and packaging. The sale is expected to close in the third quarter, subject to satisfaction of various closing conditions, including regulatory approval. The company will then be called KapStone Kraft Paper Corporation – a division of KapStone Paper and Packaging Corporation. Tim Keneally, currently vice president of IP’s kraft papers business, will lead the KapStone Kraft Paper operation.
“The acquisition is an important first step for our company,” says Stone Arcade chairman and ceo Roger Stone. “It provides us with a very solid platform from which we hope to expand. We look forward to working with the current management group to develop internal growth opportunities while we simultaneously explore strategic acquisitions.”
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