The Androscoggin mill produces around 425,000 tons of paper annually while the Stevens Point mill produces about 210,000 tons of paper per annum
Image: Pixelle agreed to acquire Androscoggin and Stevens Point mills from Verso Corporation. Photo: courtesy of chitsu san from Pixabay.
US-based speciality paper manufacturer and supplier Pixelle Specialty Solutions has agreed to acquire Androscoggin mill and Stevens Point mill from Verso for $400m.
Located in Jay, Maine, the Androscoggin mill produces around 425,000 tons of paper annually and is currently producing flexible packaging papers, release liner base, speciality labels, kraft papers and linerboard.
The Stevens Point mill, located in Wisconsin, has the capacity to produce about 210,000 tons of paper annually and now produces coated flexible packaging papers, release liner base, thermal papers, and other speciality labels.
Pixelle, which was established by private investment firm Lindsay Goldberg in 2018, is due to become the largest speciality paper business in the US in terms of annual production upon completion of the transaction.
The acquisition is expected to be closed in the first quarter of 2020
Lindsay Goldberg affiliate partner Steven Klinger said: “When we created Pixelle, we stated that we would leverage our differentiated, customized approach to manufacturing to help Pixelle build on its great reputation with customers and strengthen its positions in the specialty paper markets it serves.
“Since then, we have made significant progress and we believe there are still many opportunities to continue to drive growth and enhance our operations.
“Through the addition of these two mills, we are positioning Pixelle for the future and look forward to continuing to be the best supplier and partner for our customers.”
Verso said that the divestment is subject to and conditioned upon the receipt of approval from its stockholders, as well as certain regulatory and other customary approvals. The transaction is expected to be closed in the first quarter of 2020.
On the transaction, Credit Suisse and Citizens Bank are acting as financial advisors and Cravath, Swaine & Moore is serving as legal advisor to Pixelle.
For Verso, Houlihan Lokey is acting as financial advisor and Akin Gump Strauss Hauer & Feld is serving as legal counsel on the transaction.
Pixelle president Tim Hess said: “We are very excited about the new specialty capabilities and talented workforce that will be added to our portfolio.
“With Lindsay Goldberg’s resources, industry experience and management talent, combined with Pixelle’s skilled workforce and world class assets, we are building a high-performance, specialized business for our customers.”
Earlier this month, South African paper and pulp maker Sappi has acquired Matane pulp mill in from Rayonier Advanced Materials for $175m.