SEATTLE (Scrap Monster): Verso Corporation today announced that it has reached a definitive agreement with Spring Grove, PA-headquartered Pixelle Specialty Solutions LLC to sell its Androscoggin mill at Jay, Maine, and its Stevens Point mill at Stevens Point, Wisconsin. The transaction is valued at $400 million and is subject to regulatory and customary closing conditions. The sale is expected to be completed in the first quarter of 2020.
The transaction is expected to generate net cash proceeds of approximately $336 million, after accounting for Pixelle assumption of around $35 million of pension liabilities, working capital adjustments and payment of transaction related expenses. A significant portion of the net proceeds will be returned to Verso’s stockholders either by way of dividend or share repurchase. Approximately $54 million will be utilized to reduce a portion of its unfunded pension liability. The remaining proceeds will be used for general corporate purposes.
The financial advisor to the transaction was Houlihan Lokey, whereas Akin Gump Strauss Hauer & Feld LLP acted as the legal Counsel to the company.