According to foreign media reports, billerudkorsn ä s will acquire Verso company, become one of the world’s largest suppliers of primary fiber paper and packaging, and expand its business in North America.

Billerudkorsn ä s signed an M & a agreement with Verso and agreed to acquire Verso with about US $825 million in cash. According to the M & a agreement, Verso will merge with a wholly-owned subsidiary of billerudkorsn ä s. For the past 12 months ended September 30, 2021, the combined net sales of billerudkorsn ä s and Verso were approximately SEK 36.7 billion, and the combined net sales of adjusted EBITDA for the same period were approximately SEK 5 billion.

The acquisition of Verso is fully in line with billerudkorsn ä s’s strategy to promote the profit growth of paperboard and its ambition to expand in the North American market. Billerudkorsn ä s will convert some of Verso’s assets into paperboard machines while maintaining its quality and cost leadership in the field of specialty paper and coated paper, so as to establish the most cost-effective and sustainable paperboard platform in North America. Verso’s strategic assets are located in an area with a “rich and cost-effective” fiber supply, suitable for the production of high-quality packaging materials. Verso will become a platform for billerudkorsn ä s’s future expansion in North America and is expected to provide sustained growth opportunities in the next decade and beyond.

Verso’s Escanaba plant transformation plan will create a world-class, sustainable and fully integrated paperboard production base. It is estimated that one machine will be transformed by 2025 and the second machine will be transformed by 2029. The total capacity after transformation is about 1.1 million tons. According to billerudkorsn ä s, the investment in the reconstruction project will be as high as SEK 9 billion, of which about two-thirds will be invested by 2025 and the rest by 2029. After the transformation, compared with now, it will increase the net capacity of about 400000 tons, coupled with a more profitable product portfolio, which can create huge shareholder value.

In addition to continuing paper production in Escanaba during the transformation period, billerudkorsn ä s also plans to continue to operate quinnesec plant, which has an annual output of about 400000 tons of paper and 200000 tons of commercial pulp. It is a leader in the cost and quality of graphic paper, especially coated paper and special paper. Billerudkorsn ä s promises to continue to provide services to Verso’s existing customers.

Verso’s geographical location also provides favorable export opportunities for Asia and Europe. Christoph Michalski, President and CEO of billerudkorsn ä s, said: “Billerudkorsn ä s’s expertise in high-quality primary fiber packaging materials, combined with Verso’s attractive assets, has created a good platform for long-term profit growth. We will obtain cost-effective production of coated primary fiber materials in the Midwest of the United States. We also plan to transform part of our business into paperboard production in turn, while continuing to serve the United States Provide services to domestic customers. Our investment will create new American jobs in a growing market and accelerate the transition from plastic packaging materials to renewable resources. “

The acquisition and transformation will be financed through a combination of rights issue, additional debt and operating cash flow. Billerudkorsn ä s has signed a new SEK 6 billion credit line for acquisition and transformation investments, provided by Bank of Denmark and SEB, which plans to refinance through the issuance of debt instruments and equity rights issues.