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SCA, a global hygiene and forest products company, and Wausau Paper Corp., a North American away-from-home tissue company, announced that SCA will acquire Wausau Paper for $10.25 per share or total consideration of $513 million in cash.

October 14, 2015

SCA, a global hygiene and forest products company, and Wausau Paper Corp. (Wausau Paper), a North American away-from-home tissue company, announced that SCA will acquire Wausau Paper for $10.25 per share or total consideration of $513 million in cash. The boards of directors of both companies have unanimously approved a definitive merger agreement, a company press release stated. The merger consideration represents a premium of 40.6 percent to Wausau Paper’s closing price on Oct. 12 and a premium of 11.3 percent to the Wausau Paper 52-week volume weighted average price. SCA has funding available.

Wausau Paper is one of the largest away-from-home tissue companies in North America. With approximately 900 employees, the company manufactures and markets away-from-home towel and tissue products along with soap and dispensing systems through its Artisan, DublNature, DublSoft and EcoSoft brands, the release stated. Wausau Paper’s produces its towels and tissue entirely from recycled paper, which will further contribute to SCA’s efforts to create environmentally-friendly products and extend its sustainability commitment. The combined operations will provide customers with access to a comprehensive portfolio of food-service offerings and premium tissue and washroom products. Following completion of the acquisition, SCA will continue to honor Wausau Paper’s existing customer contracts and programs.

"SCA is the world leading supplier of Away-from-Home tissue with the global brand Tork,"  said Magnus Groth, SCA president and CEO. "The acquisition of Wausau Paper is an excellent strategic fit and strengthens our presence in North America. The Wausau Paper product portfolio complements SCA’s offerings in North America and gives us access to premium tissue in that region. We expect the acquisition to generate benefits for SCA and our customers."

"Our Board has undertaken a thorough process to explore all of Wausau Paper’s options and has determined SCA’s offer creates substantial value and is in the best interests of the company and its shareholders," said Michael C. Burandt, chairman and CEO of Wausau Paper. "This transaction is a testament to our talented team of employees and the strong, focused company that they have worked to create. Our customers will benefit from expanded products and services from a company that shares similar values around customer service and sustainability."

Wausau Paper’s reported sales for the first half year 2015 amounted to $175 million, EBITDA of $32 million and operating profit of $11 million, the release stated. Wausau Paper’s reported sales in 2014 amounted to $352 million, EBITDA of $38 million and operating profit of $3 million.

"This acquisition will benefit customers by providing access to the superior sales, service, innovation and logistics that the combined business can provide," said Don Lewis, president of SCA Americas. "It will expand SCA’s premium tissue and washroom assortment and give Wausau Paper customers the ability to purchase products from SCA’s industry-leading food service offerings — in essence offering customers a ‘one-stop shop’ for all professional hygiene needs. Furthermore, we look forward to welcoming Wausau Paper’s employees to the SCA family."

The acquisition is expected to generate annual synergies amounting to approximately $40 million with full effect three years after closing, the release stated. Synergies are expected in sourcing, production, logistics, reduced imports, increased volumes of premium products and reduced SG&A costs. The restructuring costs are expected to amount to approximately $50 million.

The completion of the transaction is subject to Wausau Paper shareholder and regulatory approvals. The Wausau Paper board will recommend that its shareholders vote in favor of the acquisition by SCA. Closing is expected to take place during Q1 2016.