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Verso Paper to acquire NewPage in 

$1.4 billion deal

Mon Jan 06, 10:45AM EST

6 January 2014 - US coated papers producer Verso Paper Corp (NYSE:VRS) has inked a deal worth USD1.4bn (EUR1bn) to buy Ohio-based sector player NewPage Holdings Inc, the parties announced in a joint statement today. The tie-up will form a company with total sales of a roughly USD4.5bn and 11 plants located in six US states. It will also lead to at least USD175m of pre-tax total cost synergies, to be achieved during the first 18 months following closing. The terms of the deal call for the buyer to pay USD250m in cash, issue USD650m of new first lien notes as well as Verso common stock that corresponds to a roughly 20% stake. Verso intends to use USD750m in committed funding to cover the cash portion and to refinance NewPage's existing USD500m term loan. The transaction is awaiting regulatory clearance and is scheduled for completion in the second half of 2014. NewPage, with mills located in Kentucky, Maine, Maryland, Michigan, Minnesota and Wisconsin, is engaged in the production of printing and speciality papers. Evercore Partners Inc (NYSE:EVR), Barclays Plc (LON:BARC) and Credit Suisse Group AG (VTX:CSGN) acted as Verso's M&A consultants, while Kirkland & Ellis LLP, Morgan, Lewis & Bockius LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP offered legal advice to the buyer. Palisades Capital also served as Verso's financial advisor. At the same time, Goldman, Sachs & Co and Sullivan & Cromwell LLP consulted NewPage. Country: USA Sector: Paper/Packaging/Office Supplies Target: NewPage Holdings Inc Buyer: Verso Paper Corporation Deal size in USD: 1.4bn Type: Corporate acquisition Financing: Cash & Stock, Debt Status: Agreed Buyer advisor: Morgan, Lewis & Bockius LLP, Barclays Plc, Paul, Weiss, Rifkind, Wharton & Garrison LLP, Kirkland & Ellis LLP, Credit Suisse Group AG, Evercore Partners Inc, Palisades Capital