Verso to merge with BillerudKorsnäs
For the City Times
MIAMISBURG, OH – Verso Corporation recently announced that it has entered into a merger agreement where BillerudKorsnäs AB will acquire all of the outstanding shares of Verso for a purchase price of $27 per share in cash, or approximately $825 million.
“Verso’s Board of Directors, acting upon the recommendation of a special committee of Verso’s board, has unanimously approved and resolved to recommend approval of the merger by Verso’s shareholders. The transaction is expected to close in the second quarter of 2022,” a Verso release stated.
“The consideration corresponds to a premium of approximately 35 percent compared to closing price of Verso’s shares on Dec. 17, 2021; a premium of approximately 26 percent compared to Verso’s volume-weighted average share price during the last 30 trading days; and a premium of approximately 57 percent compared to the unaffected closing price of Verso’s shares on July 9, 2021, the day prior to Atlas Holdings’ submission of an unsolicited, non-binding proposal to acquire Verso for $20 per share in cash.
“The acquisition of Verso is fully in line with BillerudKorsnäs’ strategy to drive profitable growth in paperboard, and the ambition to expand into North America. BillerudKorsnäs aims to build one of the most cost-efficient and sustainable paperboard platforms in North America by converting several of Verso’s assets into paperboard machines while maintaining Verso’s position as a quality and cost leader in specialty and coated freesheet paper.
“In making this acquisition, BillerudKorsnäs recognizes that Verso’s strategic assets are positioned in a region with abundant and cost-effective fiber supply suitable for production of premium packaging materials. Verso’s location also presents favorable export opportunities to both Asia and Europe. Verso will become the platform for BillerudKorsnäs’ future expansion in North America and is expected to provide continuous growth opportunities over the next ten years and beyond. The combined company will be one of the largest providers of virgin fiber paper and packaging with a cost and quality advantage.
“With the support of our talented team, Verso has successfully streamlined our operations and reduced costs while strategically investing in projects to enhance our ability to support our customers. This transaction builds upon our considerable progress and better positions the combined company to invest in our North American manufacturing capability, provide high-quality paper products to customers and accelerate growth,” Verso President/CEO Randy Nebel said.
“This agreement follows careful consideration and negotiation led by the special committee of our board which was formed following receipt of the unsolicited proposal earlier this year. Our full board believes this transaction maximizes value for shareholders, who will receive a significant premium and immediate and certain value.
“In BillerudKorsnäs, we found a partner that shares our commitments to safety, quality, sustainability and innovation and is uniquely positioned to recognize the value of our business. We are grateful for BillerudKorsnäs’ partnership over the past several months in reaching this compelling transaction, particularly amidst an uncertain and restrictive pandemic-related travel environment. We are excited to join forces with BillerudKorsnäs and benefit from enhanced opportunities as part of a larger, stronger organization.”
“The combination of BillerudKorsnäs’ expertise in high-quality virgin fiber packaging materials and Verso’s attractive assets creates an excellent platform for long-term profitable growth. We will obtain cost-effective production of coated virgin fiber material in the Midwestern United States. We also plan to sequentially transform part of the business into paperboard production while continuing to serve the U.S. customers. Our investments will create new U.S.-based jobs in a growing market and accelerate the transition from plastic-based packaging materials to renewable sources,” BillerudKorsnäs President/CEO Christoph Michalski stated.
BillerudKorsnäs plans to convert Verso’s largest facility, its Escanaba mill, into a world-class, sustainable, fully integrated paperboard production site. One machine is estimated to be converted by 2025, a second machine by 2029, with a total capacity of around 1,200,000 tons (1,100 ktonnes). BillerudKorsnäs estimates that the investment for the conversion project will be up to approximately $1 billion.
In addition to continued paper production in Escanaba during the conversion, BillerudKorsnäs plans to continue operating the Quinnesec Mill, a cost and quality leader in graphic paper, specifically in coated freesheet and specialty papers. The mill has the capacity to produce about 430,000 tons (400 ktonnes) of graphic and specialty papers and 240,000 tons (200 ktonnes) of market pulp per year.
Rep. Scott Krug said that representatives of BillerudKorsnäs expressed that “there are no immediate plans to bring operations at the Wisconsin Rapids mill back to full capacity.”
“However, in consultation with Senator Testin and stakeholders within the industry, I will be communicating to BillerudKorsnäs how integral the Wisconsin Rapids mill is to the industry and identifying potential next steps to reactivate the mill, potentially including legislation that would help connect BillerudKorsnäs with buyers for their newly acquired assets here in Wisconsin Rapids,” he added.
“How this sale exactly effects the mill in Wisconsin Rapids is to be determined but we are working with all parties to determine the best course of action for our community.
“We will continue to fight to ensure that all the options are considered to bring production back to Wisconsin Rapids and that Wisconsin Rapids and state of Wisconsin continue to move forward.”
BillerudKorsnäs said that it “is committed to continuing to serve Verso’s existing customers.”
BillerudKorsnäs has seven production units in Sweden and Finland, and about 4,400 employees in over 13 countries. For more information, visit www.billerudkorsnas.com.
The transaction is expected to be complete in mid-2022.