Stora Enso to Sell Papyrus to Private Equity Group
March 6, 2008 - Stora Enso said that it has signed an agreement to sell its merchant business Papyrus to Altor Fund II for about EUR 640 million.
The deal consists of approximately EUR 490 million in cash, about EUR 93 million of net liabilities assumed by the purchaser, and a vendor note of EUR 57 million, Stora said.
"After successfully building up Papyrus and our Fine Paper business in the last few years, we believe it is critical that this channel can continue to develop independently, and in fact drive the consolidation of merchanting in Europe," said Stora Enso CEO Jouko Karvinen.
"We also believe that Altor will be a good owner for Papyrus to take this consolidation forward. The divestment includes a long-term supply agreement with Papyrus, which will maintain our strong business relationship while at the same time giving us independence in our dealings with all of our important distribution channels," Karvinen added.
Mats Nordlander will continue as head of Papyrus for a transitional period following the closing of the deal.
The cash proceeds from the sale will be used to pay down debt, Stora said.
Stora expects the sale to close in the second quarter of 2008.
Papyrus, with net sales of EUR 2 006 million in 2007, is one of Europe's leading paper merchants. It supplies 1.9 million tonnes of paper annually. Papyrus currently has a presence in 22 European countries and employs 3 100 people. Its headquarters are in Molndal, Sweden
The Altor funds (Altor) are private equity funds comprising the Altor 2003 Fund, with committed capital of EUR 650 million, and the Altor Fund II, with committed capital of EUR 1 150 million. Altor is advised by Altor Equity Partners. Altor invests in medium-sized companies in the Nordic region with a focus on value creation through growth initiatives, strategic development and operational improvements.
SOURCE: Stora Enso