NewPage to Buy Stora Enso North America in 2.5 Billion Deal
Sept. 21, 2007 - NewPage Corp.has signed a definitive agreement with and Stora Enso Oyj by which NewPage's parent company, NewPage Holding Corp., will acquire Stora Enso's paper manufacturing operations in North America.
Under the terms of the deal, Stora Enso will receive approximately $1.5 billion in cash, a $200 million note, and a 19.9% equity interest (approx. $370 million) in the new company. In addition, NewPage will assume net liabilities of about $450 million.
The deal is subject to regulatory approvals and is expected to close during the first quarter of 2008.
"We are excited about the acquisition as it is clearly part of our strategic vision to lower our overall cost and accelerate our ability to achieve sustainable financial returns above our cost of capital," said Mark A. Suwyn, Chairman and Chief Executive Officer of NewPage. "This is also important in order to help us compete with illegally dumped and subsidized foreign imports."
The deal includes Stora Enso's papermaking operations in Biron, Kimberly, Niagara, Stevens Point, Whiting and Wisconsin Rapids, Wisconsin; Duluth, Minnesota; and Port Hawkesbury, Nova Scotia, Canada.
For the year 2006, Stora Enso North America generated $2.0 billion in revenue and an adjusted EBITDA of $295 million.
According to NewPage, during 2006, the combined company on a proforma basis would have generated $4.1 billion in revenue and an adjusted EBITDA of $583 million.
The combination is expected to generate approximately $265 million in annualized cost savings. "These cost savings combined with our increased scale will enable us to make further high-return investments in lower cost capacity, increase supply chain efficiencies and product availability and enhance environmental leadership," said Rick Willett, president and COO of NewPage.
"Today, both companies enjoy leading reputations for high-quality products and superior customer service, and we believe the integration will provide our customers with a stronger, more efficient platform for improvements to product and service quality as well as new product innovation," Willett added.
"This combination is very exciting for the SENA team due to the expanded scale and capabilities for our customers and a stronger platform for all of our employees," said John Gillen, president and Regional Manager of the North America Region for Stora Enso North America. "We're enthusiastic about working together with a NewPage team that shares the same cultural values of customer focus and continuous improvement through the engagement of all employees."
The sale of Stora Enso North America Inc., which comprises Stora Enso's publication and fine paper operations in North America, will reduce the Group's annual production capacity by 3.0 million tons and the number of personnel by 4,350. Stora Enso is retaining Corenso North American operations and the associated company Thiele Kaolin Company Inc. Corenso produces cores and coreboard for industrial use in various fields of business and Thiele produces china clay for the paper industry.
The new company will retain the NewPage name and will be headquartered in Miamisburg, Ohio.
NewPage, headquartered in Miamisburg, Ohio, is a leading U.S. producer of coated papers in North America. The company produces coated papers in sheets and rolls with many finishes and weights to offer design flexibility for a wide array of end uses. With more than 4,300 employees, NewPage operates integrated pulp and paper manufacturing mills located in Escanaba, Michigan; Luke, Maryland; Rumford, Maine; and Wickliffe, Kentucky; and a converting and distribution center in Chillicothe, Ohio. The mills have a combined annual capacity of approximately 2.2 million tons of coated paper.
Stora Enso Oyj is an integrated paper, packaging and forest products company, producing publication and fine paper, packaging board and wood products - all areas in which the Group is a global market leader. Stora Enso's sales totaled EUR 14.6 billion in 2006. The Group has some 44,000 employees in more than 40 countries on five continents. Stora Enso has an annual production capacity of 18.2 million tones of paper and board and 7.4 million cubic meters of sawn wood products, including 3.2 million cubic meters of value-added products. Stora Enso's shares are listed in Helsinki, Stockholm and New York.
Stora Enso North America is a leading producer of coated and supercalendered papers, and a premier producer of specialty papers. Other products include newsprint, elemental chlorine-free kraft pulp, totally chlorine-free mechanical pulp and recycled pulp from recovered paper. The company produces 3.0 million tons of paper annually and had revenues of $2.3 billion with about 4,350 employees in 2006.
SOURCE: NewPage Corp.
Under the terms of the deal, Stora Enso will receive approximately $1.5 billion in cash, a $200 million note, and a 19.9% equity interest (approx. $370 million) in the new company. In addition, NewPage will assume net liabilities of about $450 million.
The deal is subject to regulatory approvals and is expected to close during the first quarter of 2008.
"We are excited about the acquisition as it is clearly part of our strategic vision to lower our overall cost and accelerate our ability to achieve sustainable financial returns above our cost of capital," said Mark A. Suwyn, Chairman and Chief Executive Officer of NewPage. "This is also important in order to help us compete with illegally dumped and subsidized foreign imports."
The deal includes Stora Enso's papermaking operations in Biron, Kimberly, Niagara, Stevens Point, Whiting and Wisconsin Rapids, Wisconsin; Duluth, Minnesota; and Port Hawkesbury, Nova Scotia, Canada.
For the year 2006, Stora Enso North America generated $2.0 billion in revenue and an adjusted EBITDA of $295 million.
According to NewPage, during 2006, the combined company on a proforma basis would have generated $4.1 billion in revenue and an adjusted EBITDA of $583 million.
The combination is expected to generate approximately $265 million in annualized cost savings. "These cost savings combined with our increased scale will enable us to make further high-return investments in lower cost capacity, increase supply chain efficiencies and product availability and enhance environmental leadership," said Rick Willett, president and COO of NewPage.
"Today, both companies enjoy leading reputations for high-quality products and superior customer service, and we believe the integration will provide our customers with a stronger, more efficient platform for improvements to product and service quality as well as new product innovation," Willett added.
"This combination is very exciting for the SENA team due to the expanded scale and capabilities for our customers and a stronger platform for all of our employees," said John Gillen, president and Regional Manager of the North America Region for Stora Enso North America. "We're enthusiastic about working together with a NewPage team that shares the same cultural values of customer focus and continuous improvement through the engagement of all employees."
The sale of Stora Enso North America Inc., which comprises Stora Enso's publication and fine paper operations in North America, will reduce the Group's annual production capacity by 3.0 million tons and the number of personnel by 4,350. Stora Enso is retaining Corenso North American operations and the associated company Thiele Kaolin Company Inc. Corenso produces cores and coreboard for industrial use in various fields of business and Thiele produces china clay for the paper industry.
The new company will retain the NewPage name and will be headquartered in Miamisburg, Ohio.
NewPage, headquartered in Miamisburg, Ohio, is a leading U.S. producer of coated papers in North America. The company produces coated papers in sheets and rolls with many finishes and weights to offer design flexibility for a wide array of end uses. With more than 4,300 employees, NewPage operates integrated pulp and paper manufacturing mills located in Escanaba, Michigan; Luke, Maryland; Rumford, Maine; and Wickliffe, Kentucky; and a converting and distribution center in Chillicothe, Ohio. The mills have a combined annual capacity of approximately 2.2 million tons of coated paper.
Stora Enso Oyj is an integrated paper, packaging and forest products company, producing publication and fine paper, packaging board and wood products - all areas in which the Group is a global market leader. Stora Enso's sales totaled EUR 14.6 billion in 2006. The Group has some 44,000 employees in more than 40 countries on five continents. Stora Enso has an annual production capacity of 18.2 million tones of paper and board and 7.4 million cubic meters of sawn wood products, including 3.2 million cubic meters of value-added products. Stora Enso's shares are listed in Helsinki, Stockholm and New York.
Stora Enso North America is a leading producer of coated and supercalendered papers, and a premier producer of specialty papers. Other products include newsprint, elemental chlorine-free kraft pulp, totally chlorine-free mechanical pulp and recycled pulp from recovered paper. The company produces 3.0 million tons of paper annually and had revenues of $2.3 billion with about 4,350 employees in 2006.
SOURCE: NewPage Corp.
Labels: paper industry, paper mills, paper news
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