International Paper Co., the world's largest paper maker, will sell its coated paper business to CMP Holdings LLC, an affiliate of the investment firm Apollo Management, for $1.4 billion, the companies said Monday.
The deal includes the sale of four paper mills in Maine, Michigan and in Sartell, Minn.
International Paper has been selling millions of acres of forest and had said it wanted to sell some of its paper businesses as part of an effort to boost performance.
The transaction, which requires regulatory approval, is expected to close this summer. The coated paper business generated $1.6 billion in sales for International Paper in 2005, the company said.
The purchase price includes about $1.37 billion in cash and a 10 percent stake in CMP Investments, the parent company of CMP Holdings LLC. If CMP's return on the investment hits certain marks, International Paper would have the right to receive additional payments.
"This business has been an important contributor to International Paper, and we expect it will continue to thrive under new ownership," said John Faraci, International Paper's chairman and CEO.
Last month, Stamford-based International Paper Co. reported a first-quarter loss of $1.2 billion, or $2.52 a share, as it took a charge for selling businesses. Its revenue for the quarter was $5.7 billion, up from $5.6 billion a year ago.
Its shares fell 60 cents, or 1.8 percent, to close at $33.21 on the New York Stock Exchange. They have traded in a 52-week range of $26.97 to $37.98.Duluth News Tribune
