In a $1.4 billion deal first announced one year ago and made final Wednesday, papermaking giant Verso Corp. has acquired NewPage Holdings Inc., including the West Duluth paper mill.
Verso, already the second-largest producer of coated paper in North America before the deal, said it will keep its corporate headquarters in Memphis and its existing senior leadership team will continue to run the combined company.
Verso takes over all of NewPage’s Duluth assets, including the coated paper mill and recycling facility along Interstate 35 in western Duluth.
The Duluth mill, which began operations in 1987, had 275 employees in 2014 and makes paper used for catalogs, magazines, advertising inserts and other commercial products.
Verso, which makes paper for media and marketing firms, had revenue of $1.5 billion in 2012. NewPage, which filed for Chapter 11 bankruptcy in 2011 and came out of bankruptcy in 2012, reported $3.1 billion in net revenue last year.
With the completion of the NewPage acquisition, Verso Corp. will have about $3.5 billion in annual sales and about 5,800 employees in eight mills across six states, according to Verso.
Both company boards had approved the deal a year ago. The U.S. Department of Justice approved the deal Dec. 31.
In order to satisfy the Justice Department’s concerns over unfair market shares, NewPage sold its paper mill in Biron, Wis., and its pulp and paper mill in Rumford, Maine, to Catalyst Paper Operations Inc. before Thursday’s formal union with Verso.
Following the NewPage acquisition, Verso changed its name from Verso Paper Corp. to Verso Corp.
“The combination of Verso and NewPage creates a stronger, more stable company with an effective strategy to weather industry headwinds and reduce operating costs, while ensuring our customers continue to benefit from the distinctive quality and service that they have come to expect from us,” David J. Paterson, Verso’s CEO, said in a statement. “We continue to face increased competition from electronic substitution for print and from international producers, but as a larger, more efficient organization with a sustainable capital structure, we are better positioned to deliver solid results despite the industry’s continuing challenges.”
Both companies had come into tough times in recent years as demand for paper has declined. But Wall Street apparently likes the deal. Verso’s stock has increased from just $0.65 one year ago to $3.44 Thursday afternoon.