Verso Paper Corporation has completed its acquisition of NewPage Holdings for a value of approximately 1.4 billion USD, and will now look to ‘broaden its business platform and seek alternative revenue streams’.
The acquisition was originally announced on January 6, 2014, and its completion means Verso will have approximately 3.5 billion USD in annual sales and around 5,800 employees in eight mills across six states.
Following completion of the acquisition, Verso has changed its name from Verso Paper Corporation to Verso Corporation. Verso said the name change symbolizes its intention to broaden its business platform and seek alternative revenue streams to augment its core printing papers, specialty papers and pulp segments.
In a related transaction, immediately prior to Verso’s acquisition of NewPage, the latter completed the divestiture of its paper mill in Biron, Wisconsin, and its pulp and paper mill in Rumford, Maine, to Catalyst Paper Operations, a subsidiary of Catalyst Paper Corporation.
The divestiture, originally announced on October 30, 2014, was undertaken pursuant to a settlement with the United States Department of Justice that enabled the NewPage acquisition to proceed.
Verso’s board of directors has increased in size from nine to 10, Robert M. Amen, formerly a director of NewPage, elected to serve as a director of Verso.
Verso’s website address has also been changed to www.versoco.com.
David J. Paterson, Verso’s president and chief executive officer, said: ‘The combination of Verso and NewPage creates a stronger, more stable company with an effective strategy to weather industry headwinds and reduce operating costs, while ensuring our customers continue to benefit from the distinctive quality and service that they have come to expect from us.
‘We continue to face increased competition from electronic substitution for print and from international producers, but as a larger, more efficient organization with a sustainable capital structure, we are better positioned to deliver solid results despite the industry’s continuing challenges.
The combination is expected to result in substantial cost synergies over the next 18 months, and Paterson said: ‘With the complementary asset base and shared strategic focus on coated paper manufacturing, this acquisition represents a relatively low integration risk, so we remain confident that we can deliver the synergies within the expected timeframe.’
NewPage chairman Mark Angelson said: ‘This combination and the related financial transactions have created value for the securities holders of both companies.
‘Our customers, our employees and the communities in which they live and work will be in able hands with the new Verso team as they navigate the turbulent waters of this challenging industry. I thank our directors and management for a job well done in safely landing our ship, and wish the Verso team well going forward.’