Nine Dragons to acquire US Catalyst Paper mills

Hong Kong-based Nine Dragons Paper Ltd. has signed an agreement to acquire assets from Richmond, British Columbia-based Catalyst Paper, in a transaction being valued at $175 million.

The sale includes Catalyst’s paper mills in Rumford, Maine, and Biron, Wisconsin, along with associated staff at Catalyst’s facility in Dayton, Ohio. Under terms of the agreement, Catalyst will provide transition support services to Nine Dragons to help with the development of certain operational and administrative functions required for the two paper mills.

The Rumford mill operates three paper production lines with a combined annual production capacity of around 550,000 metric tons. The mill can produce coated one-side, coated freesheet and coated groundwood grades. With two kraft pulping lines and a dryer, the mill has a combined annual pulping capacity of about 520,000 metric tons for kraft pulp (both hardwood and softwood grades), of which about 400,000 metric tons are for internal consumption, with the remainder sold on the open market.

The Biron Mill operates two paper production lines with a combined annual production capacity of about 340,000 metric tons, primarily coated groundwood grades.

Nine Dragons indicates it intends to invest in growing both mills’ capacity in producing packaging paper and pulp products. Following the sale, Catalyst will focus its energies on growing its British Columbia operations.

The transaction is expected to close by the end of June 2018, provided there is a favorable vote from Catalyst’s shareholders. That meeting is scheduled for June 11, 2018.