RUMFORD — Verso Paper Corp. announced late Thursday afternoon that its senior management team will continue to lead Verso after completing its pending acquisition of NewPage Holdings.
In January, Tennessee-based Verso and Ohio-based NewPage entered into a definitive agreement for Verso to acquire NewPage for $1.4 billion.
That merger is currently held up by the U.S. Department of Justice, subject to clearance of the Hart-Scott-Rodino Antitrust Improvements Act of 1978, as amended, and the satisfaction of other closing conditions tied to the business deal, according to an April 3 news release by NewPage.
The HSR Act requires large companies to file a report with the Federal Trade Commission and Department of Justice before completing a merger, acquisition or tender offer, so that government regulators can determine whether the transaction would violate U.S. antitrust laws or could cause an anti-competitive effect in the parties’ markets.
Verso said David J. Paterson, its president and chief executive officer, will continue to lead the merged entity after the closing, which is expected to happen in the second half of this year.
Other team members are Lyle J. Fellows, Robert P. Mundy, Michael A. Weinhold, Peter H. Kesser, Kenneth D. Sawyer, Benjamin Hinchman IV and Joseph Duffy.
Paterson said this team will enable Verso to continue moving forward to complete its acquisition of NewPage, creating a stronger business that is better positioned “to serve our customers and create value for our stakeholders.”
The focus of the two companies will be to retain the best talent from Verso and NewPage going forward.
Verso and NewPage have already received regulatory approval from the Federal Energy Regulatory Commission.
Additionally, on Feb. 11, NewPage closed its new $750 million, senior-secured, term loan facility and new $350 million senior-secured, asset-backed, revolving credit facility, each of which are conditions to close the transaction, the NewPage release stated.
The term loan facility matures on Feb. 11, 2021, and the ABL facility matures on Feb. 11, 2019.
The term loan facility will be used to refinance the indebtedness under NewPage’s existing $500 million senior-secured, exit term loan credit facility, to fund a special distribution to NewPage’s stockholders for approximately $243 million, to pay certain transaction costs and for general corporate purposes, according to a NewPage filing.
The ABL facility will be used to replace NewPage’s existing $350 million revolving credit facility for general corporate purposes and to pay certain transaction costs and expenses of the pending merger between NewPage and Verso. But no amounts will be drawn under the ABL facility on the closing date other than certain letters of credit, the filing states.
Verso Paper Corp. is a leading North American producer of coated papers (including coated groundwood, coated freesheet and specialty products) with $1.4 billion in net sales for the year ended Dec. 31. Verso is headquartered in Memphis, Tenn., and owns paper mills in Jay and Bucksport, as well as one in Michigan.
NewPage is a leading producer of printing and specialty papers in North America with $3.1 billion in net sales for 2013. NewPage is headquartered in Miamisburg, Ohio, and owns paper mills in Rumford, Kentucky, Maryland, Michigan, Minnesota and Wisconsin.
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