Packaging Dynamics Corporation (“Packaging Dynamics”), a leader in flexible packaging and specialty papers, today announced the signing of a definitive agreement to sell its Thilmany Papers business unit to a new company to be formed and controlled by investment funds sponsored by KPS Capital Partners LP (“KPS”).
Wausau Paper has previously announced that it had signed a non-binding Letter of Intent to sell its Specialty Paper business to this new company being formed by KPS.
Following the closing of these transactions, the new company will include Thilmany Papers’ Nicolet and Kaukauna mills and Wausau Paper’s Mosinee and Rhinelander mills, all of which are located in Wisconsin, as well as the output of Verso Paper’s number five paper machine in Jay, Maine.
Roger Prevot, CEO of Packaging Dynamics, commented, “This is truly an extraordinary opportunity to contribute our Thilmany Papers business to form a larger specialty papers company that will deliver lasting value to customers, employees and to the communities in which it operates, and for us to focus exclusively on our attractive downstream packaging and converting businesses.”
Seth Hollander, a partner at Kohlberg & Company, commented, “We are pleased that our efforts to transform Thilmany’s mill operations and to build a world-class organization have positioned the paper business to make this next step in its evolution.”
Kohlberg & Company acquired Thilmany from International Paper and subsequently combined it with Packaging Dynamics. Hollander added, “We look forward to operating Packaging Dynamics as a focused leader in its food packaging and specialty laminations end markets and continuing to grow those businesses organically and through additional acquisitions.”
Russ Wanke, Vice President and General Manager of Thilmany Papers, commented, “Our team here at Thilmany is proud to be playing a critical role in the creation of a major new Wisconsin-based company. By combining Thilmany and Wausau’s Specialty Paper Business, we and KPS are establishing one of the leading specialty paper companies in North America. We believe the combination will result in a company with the product breadth and customer reach to capitalize on the growing worldwide demand for specialty papers.”
Closing of the Thilmany Papers transaction is conditioned upon the completion of the Wausau transaction, ratification of a new collective bargaining agreement between the new company and the United Steel Workers, required regulatory clearances, and certain other customary closing conditions. While Packaging Dynamics expects to finalize the transaction in mid-2013, there can be no certainty or assurance about the timing, specific elements or completion of a transaction.
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