The coated paper producer Verso Paper Corp., headquartered in Memphis, Tenn., has announced plans to acquire Miamisburg, Ohio-based NewPage Holdings, which produces printing and specialty papers. The deal is valued at nearly $1.4 billion.
Upon closing, the combined company will have sales of about $4.5 billion and will maintain 11 manufacturing facilities in six states. The proposed transaction has been approved by the boards of directors for both companies and is expected to close by the second half of 2014.
David Paterson, Verso’s president and CEO, says, “The combination of Verso and NewPage will create a stronger business that is better positioned to serve our customers and compete in a competitive global marketplace."
Paterson continues, "We continue to face increased competition from electronic substitution for print and international producers, but as a larger, more efficient organization with a sustainable capital structure, we will be better positioned to compete effectively and deliver solid results despite the industry’s continuing challenges. Furthermore, we believe the transaction provides stakeholders in both companies with meaningful, compelling value.”
George Martin, NewPage’s president and CEO, says, “We believe this agreement with Verso represents the best way forward for our stakeholders. A combined Verso and NewPage will be able to achieve greater efficiencies, which will enable it to serve clients with a high level of product quality and innovation. Together we will have increased manufacturing efficiency, greater flexibility and an even more solid and capable platform.”
Verso owns paper mills in Maine and Michigan with total production capacity of 1.5 million tons of paper and 930,000 tons of pulp. NewPage owns paper mills in Kentucky, Maine, Maryland, Michigan, Minnesota and Wisconsin. These mills have a total annual production capacity of about 3.5 million tons of paper.