Verso to sell Jay paper mill in $400M deal
Verso Corp. (NYSE: VRS), which last year began upgrading its paper mill in Jay, plans to sell the mill to a Pennsylvania producer of specialty paper.
Pixelle Specialty Solutions LLC will buy the Androscoggin Mill and another Verso manufacturing facility in Wisconsin for $400 million, according to news releases Tuesday morning from both companies. The sale is expected to close in the first quarter of 2020.
The mill in Jay has about 400 employees and a production capacity of 425,000 tons of paper per year. It currently turns out flexible packaging paper, release liner paper, specialty labels, kraft paper and linerboard.
In 2018, Miamisburg, Ohio-based Verso began upgrades to the mill’s No. 4 machine so that it could turn out more release liner paper. The upgrades were to be done in two phases over the next 18 months.
Release liner paper is used as a backing for labels and bandages to prevent premature adhesion.
At the time, Verso President of Graphic Papers Mike Weinhold said, “These investments advance Verso's strategy to reposition 100% of the Androscoggin Mill's production to serve specialty paper and packaging markets."
Earlier in 2018, the company announced plans to restart its No. 3 paper machine, which had been shut down since July 2017.
With the purchase of the mill and a smaller Verso one in Stevens Point, Wisc., Pixelle will be the largest specialty paper business in the U.S., with an annual production capacity of over 1 million tons, the company said in its release. Pixelle, formed in 2018, also has mills in Chillicothe, Ohio, and near its headquarters in Spring Grove, Pa.
In addition to the two mills being acquired, Verso owns four others, all in the Midwest. The mill in Jay has been producing paper since 1885.
On Tuesday morning, shares of Verso were trading at over $18, after beginning the day at $16.38.
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