International Paper To Sell Coated Paper Business
International Paper has signed a definitive agreement to sell its coated and supercalendered papers business to CMP Holdings LLC, an affiliate of private investment firm Apollo Management for approximately $1.4 billion, International Paper announced yesterday.
IP had previously announced plans to focus on uncoated papers and industrial and consumer packaging.
IP's coated and supercalendered papers business includes four paper mills, located in Jay, ME; Bucksport, ME; Quinnesec, MI.; and Sartell, MN. It annually produces approximately 2 million tons of coated freesheet and coated groundwood papers for the magazine, catalog and retail insert markets. The business, which is headquartered in Memphis, TN, employs approximately 3,000 people and generated $1.6 billion in sales in 2005.
The transaction is expected to close in mid-summer 2006.
CMP Holdings will acquire the business for approximately $1.37 million in cash plus approximately $30 million in the form of a 10-percent limited partnership interest in CMP Investments LP, the parent company of CMP Holdings. This interest includes the right to receive additional payments contingent upon the buyer's achievement of certain investment return hurdles.