- NewCo will acquire the assets of Wausau’s Rhinelander and Mosinee mills; the assets of Wausau’s Brainerd mill are not included in the transaction;
- The transaction requires that the United Steelworkers ratify new collective bargaining agreements with NewCo;
- Wausau will retain legacy defined benefit pension and post-retirement liabilities related to the businesses being sold to NewCo; and
- The initial cash purchase price will be approximately $130 million, subject to KPS’ confirmatory due diligence and adjustments for the ultimate treatment of certain transaction related liabilities and customary post closing adjustments.
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: