Sappi buys Cham Paper’s specialty paper business
Dec. 5, 2017 - Sappi Limited, a global producer of dissolving wood pulp, specialty and packaging papers, graphic (printing and writing) paper and biomaterials, has announced it will acquire the specialty paper business of Cham Paper Group Holding AG (CPG) for roughly US$149 million.
The transaction includes the acquisition of CPG’s Carmignano and Condino Mills in Italy, its digital imaging business located in Cham, Switzerland, as well as all brands and know-how. It will be funded through internal cash resources. The transaction is expected to be completed during the first calendar quarter of 2018.
Employing 210 people, the Carmignano Mill is a non-integrated paper mill with two paper machines and produces 100,000 tons of paper. The paper grades include C1S FlexPack, C1S Label Papers, Wet Glue and Self-Adhesive applications, base paper for metallization.
Meanwhile the Condino Mill is a non-integrated paper mill with one paper machine. It employs 120 employees and can produce 60,000 tonnes of paper per year. Paper grades include glassine (silicone base paper) and super calendared, uncoated flexible packaging papers.
The Digital Imaging Business operates a finishing plant in a 4,000-square-metre industrial warehouse where the base paper from Condino or Carmignano mills is converted to produce 12,000 tonnes of digital imaging paper. The business employs 50 people.
“This acquisition further strengthens Sappi’s speciality paper business both in Europe and globally by combining Cham’s strong brands and assets with Sappi’s global reach,” said Steve Binnie, CEO of Sappi Limited. “This transaction will increase profitability and unlock the significant growth and innovation potential inherent within the speciality paper market.”
According to Sappi, the main benefits of the acquisition include:
• Supports Sappi’s diversification strategy and 2020 vision to grow in higher margin growth segments;
• Strengthens Sappi Europe’s speciality and packaging papers footprint and skills; adds 160,000 tonnes of specialty paper to its capacity;
• Increases Sappi’s relevance in specialty papers, opening up new customers and markets to Sappi’s existing products and generating economies of scale and synergies;
• Gaining greater share-of-wallet with valued brand owners; accelerating innovation and new product development;
• Improved near-term profitability and serve as platform for organic growth and further acquisitions. Will add €183 million of sales and approximately €20 million of EBITDA before taking into account synergies;
• Builds on the investments currently underway to increase specialty paper capacity at its Somerset, Maastricht and Alfeld Mills; and
• Unlocks the growth potential of the CPG specialty paper business.
The specialty paper business of CPG will continue to operate separately and independently from Sappi until clearances from the authorities are obtained.
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