Verso Corporation, a leading North American producer of printing and specialty papers and pulp, announced the completion of its acquisition of NewPage Holdings Inc. The transaction, valued at approximately $1.4 billion, originally was announced on January 6, 2014. With the completion of the NewPage acquisition, Verso will have approximately $3.5 billion in annual sales and approximately 5,800 employees in eight mills across six states.
“The combination of Verso and NewPage creates a stronger, more stable company with an effective strategy to weather industry headwinds and reduce operating costs, while ensuring our customers continue to benefit from the distinctive quality and service that they have come to expect from us,” said David J. Paterson, Verso’s president and chief executive officer. “We continue to face increased competition from electronic substitution for print and from international producers, but as a larger, more efficient organization with a sustainable capital structure, we are better positioned to deliver solid results despite the industry’s continuing challenges.”
The combination is expected to result in substantial cost synergies over the next 18 months. “With the complementary asset base and shared strategic focus on coated paper manufacturing, this acquisition represents a relatively low integration risk, so we remain confident that we can deliver the synergies within the expected timeframe,” Paterson said.
“This combination and the related financial transactions have created value for the securities holders of both companies,” said Mark Angelson, chairman of NewPage. “Our customers, our employees and the communities in which they live and work will be in able hands with the new Verso team as they navigate the turbulent waters of this challenging industry. I thank our directors and management for a job well done in safely landing our ship, and wish the Verso team well going forward.”
Divestiture of Biron and Rumford Mills
In a related transaction, immediately prior to Verso’s acquisition of NewPage, NewPage completed the divestiture of its paper mill in Biron, Wisconsin, and its pulp and paper mill in Rumford, Maine, to Catalyst Paper Operations Inc., a subsidiary of Catalyst Paper Corporation. The divestiture, originally announced on October 30, 2014, was undertaken pursuant to a settlement with the United States Department of Justice that enabled the NewPage acquisition to proceed.
Promptly after the NewPage acquisition was completed, Verso changed its name from Verso Paper Corp. to Verso Corporation. The name change symbolizes Verso’s intention to broaden its business platform and seek alternative revenue streams to augment its core printing papers, specialty papers and pulp segments. Verso’s ticker symbol on the New York Stock Exchange will remain the same. Verso’s website address has been changed to www.versoco.com.
Leadership and Governance
As previously announced, Verso’s existing senior leadership team will continue to lead the organization, with Paterson continuing as president and CEO. The rest of Verso’s senior leadership team consists of the following persons, each of whom currently is an executive of Verso:
- Lyle J. Fellows, Senior Vice President of Manufacturing and Energy, is responsible for the mill and converting network, forest resources, manufacturing technology and energy.
- Robert P. Mundy, Senior Vice President and Chief Financial Officer, has responsibility for all financial areas, including financial planning and analysis, tax, corporate finance and treasury functions, accounting and audit functions, and investor relations.
- Michael A. Weinhold, Senior Vice President of Sales, Marketing and Product Development, is responsible for sales, marketing, e-commerce, new business development, planning, logistics, customer service, field technical sales, product development and pricing management.
- Peter H. Kesser, Senior Vice President, General Counsel and Secretary, has responsibility for all legal matters, including governance and compliance.
- Kenneth D. Sawyer, Senior Vice President of Human Resources and Communications, is responsible for all human resources and people systems, including talent management and development, labor relations, performance management, compensation and benefits, as well as communications and public affairs.
- Benjamin Hinchman, IV, Vice President and Chief Information Officer, has responsibility for the planning, development and operation of all information technology systems.
- Joseph C. Duffy, Vice President of Integrated Planning and Control, is responsible for the integration of the two companies and other business coordination and planning activities.
In addition, following the NewPage acquisition, Verso’s board of directors increased its size from 9 to 10 directors and elected Robert M. Amen, formerly a director of NewPage, to serve as a director of Verso. Mr. Amen will serve as a Class I director whose term expires at Verso’s 2015 annual meeting of stockholders. It is anticipated that Mr. Amen will be nominated for election by Verso’s stockholders at such meeting to serve for a term of three years.