Wausau Paper signs non-binding letter of intent to sell its specialty paper business for US$130M to NewCo, a new company, to be controlled by investment funds sponsored by KPS Capital Partners; company aims to focus on tissue business
March 21, 2013
– Wausau Paper (NYSE:WPP) today announced that it has signed a non-binding Letter of Intent to sell its specialty paper business to a new company (“NewCo”) to be formed and controlled by investment funds sponsored by KPS Capital Partners L.P. (“KPS”), a New York based private equity firm with significant experience in the paper industry and in completion of complex corporate carve-outs.
KPS has also signed a non-binding Letter of Intent to acquire another company and combine it with the specialty paper business within NewCo. Wausau has the option to have an initial ownership position in NewCo of up to 25 percent with the opportunity to earn up to an additional 5 percent interest upon NewCo reaching certain performance thresholds.
Key highlights of the transaction are as follows:
The ultimate transaction is subject to acceptable confirmatory due diligence, ratification of new collective bargaining agreements and satisfactory completion of effects bargaining, required regulatory clearances, final negotiation and Board approval of the definitive agreements and certain other customary contingencies to closing, including third party financing. While the Company expects to finalize the transaction in the second quarter of 2013, there can be no certainty or assurance about the timing, specific elements or completion of a transaction. The Wausau Paper sale to NewCo is also conditional upon NewCo acquiring the other company.
Mesirow Financial, Inc. and Ruder Ware LLSC have been the financial and legal advisors to Wausau Paper. Paul, Weiss, Rifkind, Wharton & Garrison LLP have been the legal advisors to KPS.
About Wausau Paper:
Wausau Paper produces and markets specialty papers for industrial, commercial and consumer end markets as well as a complete line of away-from-home towel and tissue products. The company is headquartered in Mosinee, Wisconsin and is listed on the NYSE under the symbol WPP. To learn more about Wausau Paper visit: www.wausaupaper.com.
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