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Business North - The Daily Briefing - Business Newspaper Online
Verso acquires NewPage Holdings
NewPage Holdings Inc., owner of a paper mill in West Duluth, is being acquired by Verso Paper Corp., the buyer announced Monday morning.
The parties have reached a definitive agreement under which Verso, with mills in Michigan and Maine, will buy NewPage for $1.4 billion. The transaction will create a company having annual sales of $4.5 billion through its operations in 11 states. Boards of both corporations have approved the transaction, and the deal is expected to close in the second half of this year.
“The combination of Verso and NewPage will create a stronger business that is better positioned to serve our customer and compete in a competitive global marketplace,” Verso President and CEO David Paterson said in the announcement.
The acquisition represents “the best way forward for our stakeholders,” said NewPage President and CEO George F. Martin.
Paterson will lead the combined operation.
Verso previously owned a Minnesota paper mill in Sartell. Following a May 2012 explosion and fire, Verso shuttered that facility.
The Duluth mill has been owned by several operators including Pentair, Consolidated Papers, Stora Enso and NewPage, which emerged from bankruptcy just one year ago. Before seeking Chapter 11 protection from the courts, NewPage’s liabilities exceeded its debts by $2.5 billion.
Facing paper-less digital competition and strapped with older, less-efficient machinery, the domestic paper industry has struggled with overcapacity issues and struggled in recent years to compete against newer overseas operations.
The Duluth mill, which opened in 1987, is the newest owned by NewPage. It employs 298 persons and manufactures super-calendered paper, which is used in newspaper advertising inserts. The property also includes an adjacent paper recycling plant.
In addition to its Duluth plant, NewPage has mills in Wisconsin, Michigan, Maine, Kentucky and Maryland.
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