JAY – Two mills, including the Androscoggin mill, will be sold by Verso Corporation to a Pennsylvania-based company for $400 million, per the terms of an agreement announced this morning.
According to a statement released by Verso, the corporation entered into an agreement to sell the Androscoggin mill in Jay and the Stevens Point mill in Stevens Point, Wis. to Pixelle Specialty Solutions LLC. The sale is anticipated to go through in the first quarter of 2020.
“We have undergone a thorough and comprehensive strategic process and firmly believe that the sale of these two mills at the agreed upon terms and conditions is in the best interests of the Company and our stockholders,” Gene Davis, co-chair of the Verso Board of Directors, said as part of the corporation’s statement.
According to Verso, the sale will include $336 million in cash, as well as approximately $35 million in pension liability, working capital adjustments and expenses relating to the transaction, all to be assumed by Pixelle. The sale is contingent upon approval from the Verso stockholders and regulatory approvals.
The Androscoggin mill employs roughly 500 people, according to Verso. Over the past couple of years, Verso has shifted the mill’s production to meet the specialty paper and packaging markets, rather than graphic paper. The mill currently produces packaging paper, release liners, specialty labels, Kraft paper and linerboard. According to a press release from Pixelle, the mill has an annual capacity of roughly 425,000 tons.
Pixelle, one of the largest annual producers of specialty paper in North American, is a company based out of Spring Grove, Penn. The company was formed in 2018 by Lindsay Goldberg, a private investment firm. Presuming the sale goes through, the company will operate four mills: Androscoggin, Stevens Point, Spring Grove and Chillicothe, Ohio, totaling 12 machines and more than 1 million tons of annual production capacity.
“When we created Pixelle, we stated that we would leverage our differentiated, customized approach to manufacturing to help Pixelle build on its great reputation with customers and strengthen its positions in the specialty paper markets it serves,” said Steven Klinger, executive director of the company. “Since then, we have made significant progress and we believe there are still many opportunities to continue to drive growth and enhance our operations. Through the addition of these two mills, we are positioning Pixelle for the future and look forward to continuing to be the best supplier and partner for our customers.”
“We are very excited about the new specialty capabilities and talented workforce that will be added to our portfolio,”
Tim Hess, Pixelle’s president added. “With Lindsay Goldberg’s resources, industry experience and management talent, combined with Pixelle’s skilled workforce and world class assets, we are building a high-performance, specialized business for our customers.”
Let’s hope it’s good for the workers too.
Yes, sad that in addition to “.. the best interests of the Company and our stockholders,” they didn’t mention the interests of the 500 workers.
I hope they fare OK. I hope they dare speak up if they don’t.