The good news, for now, is neither company is planning on downsizing employees:
Neither #NewPage Holdings Inc. nor Memphis, Tenn.-based #VersoPaper Corp. plan to close any of their paper mills while the companies finalize the $1.4 billion transaction, which company officials expected to finalize during the second half of 2014, subject to regulatory approvals, said Shawn Hall, a NewPage spokeswoman.
“From a day-to-day perspective, it’s business as usual,” Hall said Monday, noting it was “too soon to tell” about how the deal might affect the roughly 1,700 workers NewPage has in central Wisconsin at facilities in Wisconsin Rapids, Biron and Stevens Point.
In a statement released Monday, David Paterson, Verso President and CEO, said the buyout positions the company to be more competitive. The merging of the two companies results in having 11 manufacturing plants in six states and project sales of nearly $4.5 billion.
The deal includes $250 million in cash and $650 million of new Verso first lien notes that will be issued at closing. NewPage will also receive Verso shares representing 20 percent of the outstanding stock immediately prior to closing. This amount may be adjusted to up to 25 percent under certain circumstances. The deal also includes the refinancing of NewPage’s $500 million term loan.
The transaction is anticipated to result in at least $175 million in pre-tax cost savings. These savings are expected within the first 18 months after the deal’s completion.
The deal, predicted to close in the latter half of 2014, was approved unanimously by the boards of each company, subject to regulatory approvals.[subscribe2]