MIAMISBURG, Ohio, Nov. 12, 2019 /PRNewswire/ -- Verso Corporation
(NYSE: VRS or the "Company") today announced that it has
entered into a definitive agreement to sell its Androscoggin mill, located in Jay, Maine, and its Stevens Point mill, located in Stevens Point, Wisconsin, to Pixelle Specialty
Solutions LLC for $400 million,
subject to post-closing adjustments.
The sale, which has been unanimously approved by the Company's
Board of Directors (the "Board"), is subject to and conditioned
upon the receipt of approval from the Company's stockholders at a
special meeting of stockholders, as well as certain regulatory and
other customary approvals. The transaction is anticipated to be
completed in the first quarter of 2020.
Gene Davis, Co-Chairman of the
Board, stated "We have undergone a thorough and comprehensive
strategic process and firmly believe that the sale of these two
mills at the agreed upon terms and conditions is in the best
interests of the Company and our stockholders. We could not be more
pleased by the efforts of the entire Senior Leadership Team and of
Les Lederer, our Interim Chief
Executive Officer since April."
Net cash proceeds of the transaction are anticipated to be
approximately $336 million, after the
assumption by Pixelle of approximately $35
million of pension liabilities, anticipated working capital
adjustments, and the payment of transaction related expenses.
The Board intends to return a significant portion of the net
proceeds to stockholders either by way of dividend or share
repurchase, conducted either by way of modified Dutch tender offer,
accelerated share repurchase program or open market purchases, and
to determine and announce the amount and form of such return
promptly following the closing of the transaction. In addition,
Verso will utilize approximately $54
million of the net proceeds to reduce a portion of its
unfunded pension liability. Any remaining net proceeds will be used
for general corporate purposes while the Board continues its
ongoing review of the Company's strategic alternatives.
Verso today also announced that Adam St.
John had been named as the Company's Chief Executive Officer
and appointed as a member of the Board. Mr. St. John has been
Senior Vice President of Manufacturing for all Verso mills and a
long-standing member of the Senior Leadership Team. Prior to
joining the Company, Mr. St. John served in a senior management
capacity at Georgia Pacific. Mr. Lederer will continue to
serve as a Senior Transaction Advisor to the Company.
Alan Carr, Co-Chairman of the
Board, further stated: "With almost three decades of paper
industry experience and more than a decade of experience with
Verso, we are confident that Adam is the right choice to lead the
Company consistent with our strategic focus. Under Adam's
guidance, we expect that our remaining mills will generate
sufficient EBITDA and cash flow to permit the Company to enhance
its competitive market position, so as to create future growth and
other opportunities."
Houlihan Lokey acted as financial
advisor and Akin Gump Strauss Hauer & Feld LLP acted as legal
counsel to the Company in connection with the transaction.
About Verso
Verso Corporation is the turn-to company
for those looking to successfully navigate the complexities of
paper sourcing and performance. A leading North American producer
of specialty and graphic papers, packaging and pulp, Verso provides
insightful solutions that help drive improved customer efficiency,
productivity, brand awareness and business results. Verso's
long-standing reputation for quality and reliability is directly
tied to our vision to be a company with passion that is respected
and trusted by all. Verso's passion is rooted in ethical business
practices that demand safe workplaces for our employees and
sustainable wood sourcing for our products. This passion, combined
with our flexible manufacturing capabilities and an unmatched
commitment to product performance, delivery and service, make Verso
a preferred choice among commercial printers, paper merchants and
brokers, converters, publishers and other end users. For more
information, visit us online at versoco.com.
Forward-Looking Statements
In this press release, all
statements that are not purely historical facts are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements may be identified by the words
"believe," "expect," "anticipate," "project," "plan," "estimate,"
"intend," "potential," "will," "may" and other similar expressions.
Forward-looking statements are based on currently available
business, economic, financial, and other information and reflect
management's current beliefs, expectations, and views with respect
to future developments and their potential effects on Verso. Actual
results could vary materially depending on risks and uncertainties
that may affect Verso and its business. Verso's actual actions and
results may differ materially from what is expressed or implied by
these statements due to a variety of factors, including, without
limitation, the ability to obtain stockholder approval for the
transaction, the risk that Verso may be unable to obtain
governmental and regulatory approvals required for the transaction,
or required governmental and regulatory approvals may delay the
transaction or result in the imposition of conditions that could
cause the parties to abandon the transaction, the risk that an
event, change or other circumstances could give rise to the
termination of the proposed transaction, the risk that a condition
to closing of the transaction may not be satisfied, the timing to
consummate the proposed transaction, the risk that any announcement
relating to the proposed transaction could have adverse effects on
the market price of Verso's common stock, the risk of litigation
related to the proposed transaction, disruption from the
transaction making it more difficult to maintain relationships with
customers, employees or suppliers, the diversion of management time
on transaction-related issues, and those risks and uncertainties
listed under the caption "Risk Factors" in Verso's Annual Report on
Form 10-K for the fiscal year ended December
31, 2018, as amended on April 30,
2019, and from time to time in Verso's other filings with
the Securities and Exchange Commission (the "SEC"). Verso assumes
no obligation to update any forward-looking statement made in this
press release to reflect subsequent events or circumstances or
actual outcomes.
Conference Call
Verso will host a conference call and
webcast for analysts and investors on Tuesday, November 12, 2019 at 9 a.m. (EST) to discuss third quarter 2019
financial results and the sale transaction.
Analysts and investors may access the live conference call only
by dialing 888-317-6003 (U.S. toll-free), 866-284-3684
(Canada toll-free) or 412-317-6061
(international) and referencing elite entry number 8454233 and
Verso Corporation. To register, please dial in 10 minutes before
the conference call begins. The news release and third quarter 2019
results will be available on Verso's website at
http://investor.versoco.com by navigating to the Financial
Information page.
Analysts and investors may also access the live conference call
and webcast by clicking on the event link
https://www.webcaster4.com/Webcast/Page/1524/32166 or by visiting
Verso's website at http://investor.versoco.com and navigating to
the Events page. Please go to this link at least one hour before
the call and follow the instructions to register, download and
install any necessary audio/video software.
A telephonic replay of the call can be accessed at 877-344-7529
(U.S. toll-free), 855-669-9658 (Canada toll-free) or 412-317-0088
(international), access code 10136569. The replay will be available
starting at 11 a.m. (EST) Tuesday, November
12, 2019, and will remain available until December 12, 2019. An archive of the conference
call and webcast will be available at http://investor.versoco.com
starting at 11 a.m. (EST) Tuesday, November
12, 2019, and will remain available for 120 days.
Additional Information and Where to Find It
In
connection with the proposed transactions, the Company expects to
file a proxy statement, as well as other materials, with the
SEC. WE URGE INVESTORS TO READ THE PROXY STATEMENT AND
THESE OTHER MATERIALS FILED WITH THE SEC CAREFULLY WHEN THEY BECOME
AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. Investors may obtain free copies of these
documents free of charge at the SEC's website (www.sec.gov) and
from the Company.
Participants in the Solicitation
The Company, its
directors, executive officers and other persons related to the
Company may be deemed to be participants in the solicitation of
proxies from the Company's stockholders in connection with the
proposed transaction. Information about the directors and executive
officers of the Company and their ownership of Company common stock
is set forth in the Company's Annual Report on
Form 10-K for the year ended December 2018, as amended on April 30, 2019. Other information regarding the
participants in the proxy solicitations and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the proxy statement and other relevant
materials to be filed with the SEC when such materials become
available.
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SOURCE Verso Corporation