US papers maker Vero Paper acquires rival NewPage in $1.4B buyout deal
Coated-papers manufacturer Verso Paper is purchasing NewPage Holdings Inc. The acquisition deal has a valuation of $1.4 billion, with debt included, according to ABQ Journal.
NewPage is privately held company that produces specialty and printing papers, the report said.
In a statement issued on Monday, Verso President and Chief Executive Officer David Paterson said the buyout will put the company in a better position to deal with increased competition. Under the terms of the said deal, Paterson will be the head of the merged entity, which will have 11 manufacturing facilities in six states. The plants will also have sales of around $4.5 billion, the report detailed.
The transaction is comprised of $250 million in cash and $650 million worth of new Verso first lien notes. The latter will be issued upon closing of the deal. In addition, NewPage will receive shares of Verso that represent 20% of the outstanding stock prior to closing, the report explained.
The specified amount may be adjusted to up to 25% depending on certain circumstances. The agreement also includes a $500 million term loan refinancing for NewPage, ABQ Journal reported.