agreed to sell two paper businesses to private equity giant Apollo Management for $1.4 billion.
Apollo will acquire IP's coated and super-calendared paper businesses, including related plants. Super-calendared paper is used in catalogs and magazines. The units, which did $1.6 billion in sales last year, include mills in Jay, Maine; Bucksport, Maine; Quinnesec, Mich.; and Sartell, Minn.
IP will receive $1.37 billion in cash plus about $30 million in the form of a 10% limited partnership interest in the Apollo affiliate involved in the transaction. "This interest includes the right to receive certain additional payments contingent upon the buyer's achievement of certain investment return hurdles."
To date, the company said it has sold $9.1 billion worth of noncore assets as it hones its focus on uncoated papers and industrial and consumer packaging.
"The coated papers sale agreement is another important step in transforming International Paper to narrow our focus, strengthen our returns and improve value for our shareowners," IP said. "Our coated papers unit is a good business, with talented leadership, excellent employees, quality brands and an outstanding customer base. This business has been an important contributor to International Paper, and we expect it will continue to thrive under new ownership."