Repap U.S.A is Sold
Wednesday July 9 8:39 AM EDT
Consolidated Papers to buy paper maker
WISCONSIN RAPIDS, Wis., July 9 (Reuter) - Consolidated Papers Inc said Wednesday the
company signed a letter of intent with Repap Enterprises Inc (RPP.TO) to purchase its wholly
owned subsidiary Repap USA Inc.
Based on March 31, financial statements, Consolidated Papers will pay $227 million in cash and
assume $433 million in net debt and $14 million for post-retirement benefits of the acquired
companies. The transaction totals $674 million, but will be subject to changes based on the
valuations at the time of closing, Consolidated said.
The sale is expected to close late in the third quarter.
Repap USA is the holding company for Repap Wisconsin Inc and Repap Sales Corp.
Repap Wisconsin, located in Kimberly, Wis., manufactures coated papers for the printing and
publishing industries. Its products are used for brochures, advertising inserts, annual reports, catalogs
and magazines. Repap Sales provides sales and marketing services to Repap Wisconsin.
After a definitive agreement is reached, the transaction is subject to the approvals of the companies'
boards of directors and federal regulators.
Consolidated said the Repap USA deal is in line with its goal to focus on growth in the high-end
coated paper sector.
``The products they produce are consistent with the type and quality of the coated papers we
already make,'' Gorton Evans, president, said in a statement.
He added that the acquisition expands Consolidated's presence in the coated paper market and
positions the company to better serve existing and new customers.
Repap Wisconsin has a capacity of 508,000 tons of coated paper annually, as well as an integrated
groundwood pulp mill and a paper recycling facility. Employing approximately 1,000 people, the
company reported 1996 sales of $405 million and 1995 sales of $510 million.
Consolidated Papers is North America's largest producer of coated printing papers, with an annual
capacity of 1,330,000 tons. The company's other products include supercalendered printing papers
with an annual capacity of 240,000 tons and coated specialty papers used in consumer product
packaging and labeling. |
