RHINELANDER - Wausau Paper today announced that it has signed a definitive agreement to sell its specialty paper business to a new company sponsored by KPS Capital Partners L.P. (“KPS”), a New York-based private equity firm with significant experience in the paper industry.
The new company will be known as Expera Specialty Solutions, LLC (“Expera”).
KPS, as previously announced, has also entered into a definitive agreement to acquire the specialty paper business of Packaging Dynamics Corporation
(“Thilmany”), which operates paper mills in De Pere and Kaukauna, Wisconsin.
Expera will combine the Thilmany business with Wausau Paper’s specialty paper business to create a leading North American manufacturer of specialty paper products for the food packaging, industrial, and pressure-sensitive release liner segments.
A collective bargaining agreement covering employees at the Mosinee, Rhinelander, and Kaukauna facilities has been negotiated and ratified.
The collective bargaining agreement and the Thilmany acquisition agreement were both conditions to Wausau Paper entering into its agreement with KPS.
Key highlights of the transaction are as follows:
• The transaction will result in net cash proceeds to Wausau Paper of approximately $110 million after settlement of transaction-related liabilities, transaction costs and taxes.
• Expera will acquire the assets of Wausau Paper’s Rhinelander and Mosinee mills; the assets of the company’s Brainerd mill are not included in the transaction.
• Wausau Paper will retain defined benefit pension and other post-retirement benefit obligations; however, effective with the closing of the transaction, approximately $41 million of future liability will be eliminated.
• Wausau Paper will not hold any equity ownership in Expera.
• Wausau Paper will have the opportunity to receive 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.
Hank Newell, president and CEO of Wausau Paper, commented, “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 transaction has received required regulatory approval under the Hart-Scott-Rodino Antitrust Improvements Act. Other customary conditions to closing, including third party financing, remain.
The Wausau Paper sale to Expera is also conditioned upon Expera completing the acquisition of the Thilmany business.
While the company expects to finalize the transaction in the second or third quarter of 2013, there can be no certainty or assurance about the timing or completion of a transaction.
Mesirow Financial, Inc. and Ruder Ware, L.L.S.C. have been the financial and legal advisors to Wausau Paper.
MADISON - The start of a new short-term loan program that wasn't slated to begin until July has been moved up in an effort to help businesses hurt by recent cutbacks at Oshkosh Corp.
The Wisconsin Economic Development Corporation, the state's chief jobs agency, voted this week to start the pilot program earlier. It will provide loans or loan guarantees of up to $250,000 to companies for projects or expenses that may not be eligible for traditional financing.
The board says it was starting the program earlier in light of news that Oshkosh was cutting 760 jobs from its defense division because of budget cuts being made by the U.S. Department of Defense.
The loan program this year will only target businesses in Oshkosh Corp.'s supply chain
ACROSS THE U.S. - A new proposal from the Food and Drug Administration (FDA) would expand regulation on tobacco products, including e-cigarettes, not regulated already by the agency.
The proposal, which was released Thursday, would regulate hookahs, nicotine gels, cigars and e-cigarettes. The FDA currently only regulates cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco.
Some smokers turn to e-cigarettes to try to stop smoking. Medical experts don’t know the full health impact of e-cigarettes yet. Leaders at the FDA want to get ahead of the trend.
The proposal would make e-cigarette producers register their products and show their ingredients to the agency.
ACROSS THE NORTHWOODS - Railroads give businesses a chance to move loads of material for a low cost. Loggers could use rail as an alternative to trucking material, but many businesses don’t get that opportunity in the Northwoods anymore.
Canadian National bought rail in the Northwoods about a decade ago. They have cut back service drastically since then.
Some counties haven't seen train travel in years, which hurts business. Now, those businesses want to reestablish rail service.
In response, a group of counties in Northern Wisconsin and the Upper Peninsula of Michigan formed the Northwoods Rail Transit Commission.
RHINELANDER - There was no severe weather Thursday, but sirens across the Northwoods were blaring at about 1:45 pm on Thursday.
That's because the National Weather Service held a statewide tornado drill.
It was part of their severe weather awareness week, and Oneida County took part in the drill.
"The sirens are only set off for warnings, in the city of Rhinelander, it's only going to be a Severe Thunderstorm Warning that is affecting the city area," said Oneida County Emergency Management Director Ken Kortenhof. "It's also going to be set off for a Tornado Warning affecting the area."
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