Swedish paper group BillerudKorsnäs has announced that it wishes to acquire Verso for approximately $970 million (approximately 856 million euros). Listed on the New York Stock Exchange, Verso is one of the leading producers of coated papers in North America.
Verso's board of directors has unanimously approved the transaction. The sale, if accepted by Verso's shareholders and subject to various regulations, is expected to close in the second quarter of 2022.
Created in 2006 following the sale of the coated paper activities of the International Paper Group to Apollo Global Management, Verso produces graphic paper, specialty and packaging paper and market pulp.
With an annual capacity of approximately 400,000 tons of paper and 200,000 tons of market pulp and 1,700 employees, it is one of the leading producers of coated papers in North America with sales of $1,264 million and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $158 million (year ending September 30, 2021). The purchase price is slightly more than six times adjusted EBITDA.
With this acquisition, BillerudKorsnäs intends to establish "one of the most cost-effective and sustainable paperboard production platforms in North America." .
"We want to create a profitable production of virgin fiber coated materials in the Midwestern United States. We also plan to sequentially convert some of the business to paperboard production, while continuing to serve U.S. customers," said Christoph Michalski, president and CEO of BillerudKorsnäs. Our investments will create new U.S. jobs in a growing market and accelerate the transition from plastic-based packaging materials to renewable sources."
To achieve this, BillerudKorsnäs plans to convert the first machine at Verso's largest site, the Escanaba mill, in 2025 and the second in 2029. These two converted machines will be able to produce approximately 1 Euro 100 Euro 000 tons of board.
The investment for the conversion project will amount to SEK 9 billion (EUR 872 million), of which about two-thirds will be invested until 2025 and the rest until 2029.
