Stora Enso divests its merchant business Papyrus to Altor
The total enterprise value of the transaction is approximately EUR 640 million
Stora Enso has signed an agreement to sell its merchant business Papyrus to
Altor Fund II for an enterprise value of approximately EUR 640 million. The
transaction consideration consists of approximately EUR 490 million in cash,
approximately EUR 93 million of net liabilities assumed by the purchaser, and a
vendor note of EUR 57 million. No material book-value gain or loss is expected
to be recorded in connection with the transaction and the impact on Stora Enso's
annual earnings per share will also be non-material. The sale is expected to be
finalised in the second quarter of 2008 subject to customary statutory
approvals. The cash proceeds from the transaction will be used to pay down Stora
Enso's debt.
“Today we announce another concrete step in Stora Enso's strategy of focusing
the business portfolio of our Group. After successfully building up Papyrus and
our Fine Paper business in the last few years, we believe it is critical that
this channel can continue to develop independently - and in fact drive the
consolidation of merchanting in Europe. We also believe that Altor will be a
good owner for Papyrus to take this consolidation forward. The divestment
includes a long-term supply agreement with Papyrus, which will maintain our
strong business relationship while at the same time giving us independence in
our dealings with all of our important distribution channels,” said Stora Enso
CEO Jouko Karvinen.
“We are impressed how well Papyrus has developed over recent years, and it is a
very strong platform for future growth and development. Altor's goal is to
continue to develop Papyrus into the leading and most customer-oriented merchant
in Europe. This will benefit Papyrus's customers, employees and strategic
suppliers,” said Claes Ekström, Partner at Altor Equity Partners AB.
Mats Nordlander will continue as head of Papyrus for a transitional period
following the closing of the transaction to ensure a smooth handover of the
business to a new CEO. Mats Nordlander will during this time also remain head of
Stora Enso's Consumer Board Business Area and a member of the Group Executive
Team.
Estimated financial effects of divestment of Papyrus on Stora Enso Group based
on 2007 annual figures
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| Sales reduction | EUR 1 525 million |
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| EBITDA reduction excluding non-recurring | EUR 66 million |
| items | |
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| EBIT reduction excluding non-recurring | EUR 45 million |
| items | |
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| Capital employed reduction* | EUR 600 million |
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| Debt/equity ratio | From 0.40 to 0.32 |
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*Part of the capital employed reduction relates to a release in working capital
for Stora Enso's continuing operations which is expected to be fully realised by
the end of the third quarter of 2008.
The segment Merchants will be reported as a discontinued operation in the
interim report of the first quarter of 2008.
About Papyrus:
Papyrus, with net sales of EUR 2 006 million in 2007, is one of Europe's leading
paper merchants. It supplies 1.9 million tonnes of paper annually. Papyrus
currently has a presence in 22 European countries and employs 3 100 people. Its
headquarters are in Mölndal, Sweden
Papyrus is represented locally under its own brand name and also as
Schneidersöhne, Sihl+Eika, Scaldia and Classen-Papier. Although Papyrus operates
under different names, it has a coherent one-company commitment to offering
quality products, high service levels and superior logistical solutions.
About Altor:
The Altor funds (Altor) are private equity funds comprising the
Altor 2003 Fund, with committed capital of EUR 650 million, and the Altor Fund
II, with committed capital of EUR 1 150 million. Altor is advised by Altor
Equity Partners. Altor invests in medium-sized companies in the Nordic region
with a focus on value creation through growth initiatives, strategic development
and operational improvements.
Advisors:
Stora Enso was advised by Goldman Sachs.
For further information, please contact:
Jouko Karvinen, CEO, tel. +358 2046 21410
Mats Nordlander, EVP, Consumer Board, Merchants and Market Services,
tel. +46 70 337 08 90
Kari Vainio, EVP, Corporate Communications, tel. +44 7799 348 197
Keith B Russell, SVP, Investor Relations, tel. +44 20 7016 3146
Ulla Paajanen-Sainio, VP, Investor Relations and Financial Communications, tel.
+358 40 763 8767
CONFERENCE CALL
CEO Jouko Karvinen will be hosting a conference call today at 15.00 Finnish time
(14.00 CET, 13.00 UK time, 8.00 US Eastern time).
If you wish to participate, please dial:
+44 (0)20 8609 0582 UK and international access
1 866 388
1925 USA
08 5661 9353 Sweden
0800 913 153 Finland
Further details of replay numbers can be found at www.storaenso.com/investors
www.storaenso.com
www.storaenso.com/investors
www.altor.com
STORA ENSO OYJ
p.p. Jussi Siitonen Jukka Marttila