RUMFORD — A Canadian paper company is buying the Rumford Paper Company and a second NewPage mill for $74 million in cash.
Catalyst Paper Holdings, based in British Columbia, announced the transaction. In addition to Rumford, Catalyst also will buy a NewPage paper mill in Biron, Wis.
NewPage employs about 800 people at its Rumford mill.
Catalyst owns three paper mills in the coastal communities of Crofton, Point Alberni and Powell River in British Columbia.
“With this transaction, Catalyst will be better able to serve new and existing customers through operational synergies and a more diversified and higher value suite of products,” Joe Nemeth, president and CEO of Catalyst, said in a statement. “Our acquisition of these U.S. pulp and paper mills, once complete, will support our efforts to improve our balance sheet and enhance the company’s long-term competitiveness.”
The sale will be finalized once NewPage’s merger with Verso Paper is complete. The $1.4 billion sale has been held up by the U.S. Department of Justice for an antitrust review.
Verso’s merger with NewPage “is still on track,” Kristin Manning, Verso’s executive assistant in Memphis, Tenn., said Friday morning.
The addition of the two mills will increase Catalyst’s production capacity by 65 percent, to 995,000 tons per year, the company said in a statement.
It said the Rumford mill has the capacity to produce 510,000 tons of coated specialty, coated free sheet and coated ground wood paper and 130,000-ton pulp capacity to produce both hardwood and softwood pulp.
Earlier this year, Verso announced plans to merge with NewPage. At the time, Verso owned paper mills in Jay and Bucksport. Verso recently announced plans to close its paper mill in Bucksport.
That closure, plus the sale to Catalyst, could help Verso close its deal with NewPage, which has been held up at the federal level. At the time the merger was announced, published reports said the combined company would have controlled more than 50 percent of the coated paper market in North America and employed nearly a third of the state’s paper-mill workers.
Catalyst is a paper company based in Richmond, British Columbia, Canada. According to a fact sheet on its website, it is Western North America’s largest producer of mechanical printing papers.
“Two-thirds of our sales are in specialty papers and we are Western North America’s only producer of high-value coated mechanical and soft calendered papers, popular for catalogues, books and magazine,” according to the fact sheet.
Catalyst’s remaining sales are split between high-quality newsprint grades and market pulp. These products are largely destined for export — almost entirely to Asia in the case of pulp — where market dynamics are more favorable.