US-based Wausau Paper has signed an agreement to sell its specialty paper business to a new company sponsored by a private equity firm KPS Capital Partners for about $110m.
According to Wausau Paper, the new company will be known as Expera Specialty Solutions.
Earlier KPS signed an agreement to acquire the specialty paper business of Packaging Dynamics (Thilmany), which operates paper mills in De Pere and Kaukauna, Wisconsin.
The Thilmany business will be combined by Expera with Wausau Paper’s paper business to create a North American manufacturer of specialty paper products for the food packaging, industrial and pressure-sensitive release liner segments.
Following the deal, Expera will acquire Wausau Paper’s Rhinelander and Mosinee mills’ assets excluding the company’s Brainerd mill assets.
Wausau Paper, which will not hold any equity ownership in Expera, will have the opportunity to get a contingent payment that would be equal to what the holder of a 5% equity interest in Expera would receive if certain performance thresholds and KPS liquidity events occur.
Wausau Paper president and CEO Hank Newell said, "This transaction accomplishes all of our key objectives: divesting our paper business in a way that creates value for our shareholders, creating a specialty business under new ownership with the scale and product breadth to compete globally, and narrowing our focus to accelerating growth in our tissue business."
The Wausau Paper sale to Expera is conditioned upon Expera completing the acquisition of the Thilmany business. The company hopes to conclude the deal in the second or third quarter of 2013.