Verso Corporation Announces Sale of Androscoggin and Stevens Point Mills for $400 million

November 28, 2019 Off By Sebastian Reisig

Verso Corporation announced that it has entered into a definitive agreement to sell its Androscoggin mill, located in Jay, Maine, and its Stevens Point mill, located in Stevens Point, Wisconsin, to Pixelle Specialty Solutions LLC for $400 million, subject to post-closing adjustments.

The sale, which has been unanimously approved by the Company’s Board of Directors (the “Board”), is subject to and conditioned upon the receipt of approval from the Company’s stockholders at a special meeting of stockholders, as well as certain regulatory and other customary approvals. The transaction is anticipated to be completed in the first quarter of 2020.

Gene Davis, Co-Chairman of the Board, stated “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. We could not be more pleased by the efforts of the entire Senior Leadership Team and of Les Lederer, our Interim Chief Executive Officer since April.”

Net cash proceeds of the transaction are anticipated to be approximately $336 million, after the assumption by Pixelle of approximately $35 million of pension liabilities, anticipated working capital adjustments, and the payment of transaction related expenses.  The Board intends to return a significant portion of the net proceeds to stockholders either by way of dividend or share repurchase, conducted either by way of modified Dutch tender offer, accelerated share repurchase program or open market purchases, and to determine and announce the amount and form of such return promptly following the closing of the transaction. In addition, Verso will utilize approximately $54 million of the net proceeds to reduce a portion of its unfunded pension liability. Any remaining net proceeds will be used for general corporate purposes while the Board continues its ongoing review of the Company’s strategic alternatives.