MOSINEE, Wis. (AP) -- Wausau Paper Corp. said Friday that it plans to sell its specialty paper business to New York private equity firm KPS Capital Partners L.P. for $130 million.
The deal will help Wausau Paper shift its focus to its tissue business.
KPS will create a new company to own the business. It also has plans to acquire another unnamed company and combine it with Wausau's specialty paper business under the new organization. The deal with Wausau is contingent on the second pending deal reaching completion.
As part of the deal, KPS will acquire the assets of Wausau's Rhinelander and Mosinee mills. Wausau will continue to be responsible for the legacy pension and retirement liabilities related to its specialty paper business. The deal requires that United Steelworkers ratify its new collective bargaining agreements with the new company.
Wausau has the option to have a 25 percent stake in the new business, with the opportunity to earn up to 5 percent more interest if the company reaches certain performance thresholds.
The company said that it expects to finalize the transaction in the second quarter of 2013.
Shares of Wausau jumped 6 percent to $10.94 by midday on the news. Its stock went as high as $11.05 earlier in the day, a 52-week trading high.