Pulp maker BillerudKorsnas to buy Verso in $825 million deal
STOCKHOLM, Dec 20 (Reuters) - Sweden's BillerudKorsnas will buy U.S.-based coated paper producer Verso for around $825 million in cash as the pulp and paper manufacturer looks to expand into North America, it said on Monday.
BillerudKorsnas said it would finance the acquisition and transformation of the company through a combination of a rights issue of up to 3.5 billion crowns ($382.5 million), additional debt and operating cash flow.
Verso had sales of $1.26 billion for the twelve months ended Sept. 30 and adjusted operating profit of $158 million.
BillerudKorsnas said it would build "one of the most cost-efficient and sustainable paperboard platforms in North America" by converting some Verso assets into paperboard machines, with an estimated capex of up to 9 billion crowns.
It added that Verso's board had unanimously approved, and resolved to recommend the transaction to shareholders.
"Verso will become the platform for BillerudKorsnas’ future expansion in North America and is expected to provide continuous growth opportunities over the next ten years and beyond," the Swedish company said in a statement.
BillerudKorsnas, which will report acquisition-related costs of around 135 million crowns in its fourth-quarter results, said the deal would immediately add to its earnings per share.
The company expects the transaction to close in the second quarter of 2022.
($1 = 9.1508 Swedish crowns) (Reporting by Helena Soderpalm; Editing by Vinay Dwivedi)