Verso on Monday announced that it has completed the sale of two mills — including its Androscoggin mill in Maine — as part of a $400 million deal.
That sale makes the Jay mill’s new owner, Pennsylvania-based Pixelle Specialty Solutions LLC, which also acquired Verso’s Stevens Point mill in Wisconsin, the largest specialty paper producer in North America.
Verso President Mike Weinhold said in a statement that the company will shift its focus to pulp and packaging products, as well as other specialty products at its remaining mills. The company’s CEO, Adam St. John, said the sale will leave Verso debt free.
Earlier this month, a majority of Verso stockholders approved the sale after an unsuccessful bid from two shareholders — private-equity firms Atlas Holdings and Blue Wolf Capital Partners — that sought to derail the deal. That followed approval from the company’s board of directors and regulators.
The Androscoggin mill, which employs about 500, currently produces flexible packaging papers, release liner base, specialty labels, kraft papers and linerboard. The Stevens Point mill has a 210,000-ton capacity.
The company said that up to $282 million and not less than $225 million in proceeds from the sale will be returned to stockholders.
The deal with Pixelle was announced in November 2019, just three months after Verso unveiled a plan to invest $120 million into three mills, including the one in Jay.
Verso said in August 2019 that it would invest an unspecified amount of money in the Jay mill to improve the No. 3 paper and pulp line, the No. 4 release liner paper machine and the EM-5, which produces food wrappers that can hold grease. Release liner paper is used in badges and other items that pull one piece of paper away from another.
Verso has been struggling financially and brought in a company to look at selling some of its assets or the company as a whole. In early 2015, Verso borrowed heavily to acquire its larger competitor NewPage. Later that year, it announced it would lay off 300 employees in Jay and shut down its No. 1 pulp dryer and No. 2 paper machine.
In early 2016, Verso filed for Chapter 11 bankruptcy protection and then exited the bankruptcy restructuring that same summer.
It idled the No. 3 machine in 2017 and laid off 120 employees. Those moves were in response to declining demand for coated paper used in magazines and other glossy publications.
It then announced in 2018 that it would restart the No. 3 machine and hire 120 people as it expands into new markets.