Sappi has sold three European mills to corporate carve out specialist Aurelius, the recent purchaser of Agfa’s offset plates business.
This time the offer from Aurelius Investment Lux One, valued at €272 million, topped several other binding bids. This will now proceed through the due diligence process to reach a conclusion expected early next year. A transitional services agreement will ensure a smooth transition of the businesses from one owner to the next.
The assets in question are the Maastricht Mill in the Netherlands with capacity for 260,000tpa of coated woodfree papers and board, the Kirkniemi mill in Finland which is an integrated mill with capacity for 300,000tpa of bleached mechanical pulp and 750,000tpa of coated mechanical papers for web printing and Stockstadt in Germany which produces 145,000tpa of pulp used to produce 220,000tpa on both coated and uncoated woodfree papers.
These are among the smallest mills in Sappi’s portfolio and their sale continues a journey from coated woodfree paper preeminence towards higher value products and packaging papers.
Sappi CEO Steve Binnie says: “The decision to sell these mills follows a detailed and thorough strategic review by Sappi in line with our group Thrive25 strategic focus. This includes reducing exposure to the graphic paper segment while expanding Sappi’s presence in segments including packaging and speciality papers, pulp and biomaterials.”
It is not bidding a complete farewell to graphic papers. The Gratkorn Mill in Austria is investing to reduce dependence on fossil fuel energy used to produce almost 1 million tpa of coated woodfree papers and label papers.
Sappi Europe CEO Marco Eikelenboom adds: “Going forward Sappi’s focus in Europe as regards graphic paper will be on the stronger commercial print market. In addition, in the packaging and specialities segment, the European business will predominantly focus on the flexible packaging, functional papers, self adhesives including glassine, labels as well as dye sublimation categories.”
The mills being sold, says Binnie, “are strong assets with good people”.
For Aurelius the deal continues a strategy of finding and unlocking the value in businesses that because of a change in strategy the existing owners have not been able to tap. Founding partner Dirk Markus says: “Given this key traits, this transaction offers ample opportunity to unleash the full potential of these production sites.”
