Verso completes NewPage acquisition
Verso Corporation of Memphis completed its $1.4 billion acquisition of NewPage Holdings. Completion of the deal comes just after NewPage divested itself of two mills, which are being taken over by Catalyst Paper of Richmond, British Columbia.
First announced on January 6, 2014, Verso’s purchase of NewPage brings the company approximately US$3.5 billion in annual sales and around 5,800 employees in eight mills across six American states. The NewPage acquisition also results in Verso changing its name from Verso Paper Corporation to Verso Corporation.
“We continue to face increased competition from electronic substitution for print and from international producers,” said David Paterson, Verso’s President and CEO, “but as a larger, more efficient organization with a sustainable capital structure, we are better positioned to deliver solid results despite the industry’s continuing challenges."
Paterson continued to explain the combining companies, with their complementary asset base and shared strategic focus on coated paper manufacturing, represent a relatively low integration risk.
Immediately prior to Verso’s acquisition of NewPage, on January 7, NewPage completed the divestiture of its paper mill in Biron, Wisconsin, and its pulp and paper mill in Rumford, Maine, to Catalyst Paper Operations, a subsidiary of Catalyst Paper. The divestiture, originally announced on October 30, 2014, was undertaken pursuant to a settlement with the United States Department of Justice that enabled the NewPage acquisition to proceed.
The cash payment made by Catalyst on closing was US$62.4 million, after giving effect to an adjustment under the purchase agreement based on estimated working capital at closing, and the final purchase price is subject to certain additional post-closing adjustments.
“This acquisition represents a new chapter in the history of Catalyst Paper,” said Joe Nemeth, President and CEO of Catalyst. “With the addition of the Rumford and Biron mills, Catalyst becomes a larger and stronger company with five facilities across North America and an estimated production capacity of 2.1 million tons of paper and 500 thousand tons of pulp.
“Catalyst is now the only producer in North America with manufacturing facilities in the West, Midwest and East,” continued Nemeth, “and has an enhanced product suite to effectively meet global customer needs.”