Fortress Paper to Sell Dresden Mill to Glatfelter

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The transaction is expected to close in the second quarter of this year, but no later than June 30. It is subject to certain customary conditions, including governmental anti-trust approvals in Germany and the Ukraine.

Chadwick Wasilenkoff, president and CEO of Fortress Paper, said that "the sale of the Dresden mill is an important step in Fortress Paper becoming a more focused global leader in the dissolving pulp industry. The transaction was part of our strategic plan to achieve significant liquidity to enhance future growth opportunities. We are very pleased to have been able to reach an agreement with P.H. Glatfelter and look forward to the finalization of the sale. We would also like to acknowledge the contributions of the Dresden management team over the years and wish them every success in the future."

Dante C. Parrini, Chairman and CEO of Glatfelter, noted that "Glatfelter's agreement to acquire Dresden Papier demonstrates our commitment to building leading positions in niche global growth markets for specialty papers and fiber-based engineered materials. Dresden Papier has built a preeminent position in nonwoven wallpaper materials – as both the cost and quality leader because of its innovative products, proprietary manufacturing techniques, and long-standing customer relationships.

"The acquisition of Dresden Papier will add another industry-leading nonwovens product line to our Composite Fibers business, and broaden our relationship with leading producers of consumer and industrial products. Despite the ongoing economic challenges in parts of Europe, we believe the global nonwoven wallpaper business will continue to grow at a compound annual growth rate of at least 10%. This acquisition will also provide additional operational leverage and growth opportunities for Glatfelter globally, particularly in large markets such as Russia and China, and other developing markets in eastern Europe and Asia."

In 2012, Dresden's revenues were EUR 117 million (approximately $151 million), and earnings before Interest, Taxes, depreciation, and amortization (EBITDA) were EUR 30 million (approximately $38 million). Dresden employs some 146 people at its 60,000 metric tpy facility in Heidenau, Germany.

Fortress Paper operates internationally in three distinct business segments: dissolving pulp, specialty papers, and security paper products. The company operates its dissolving pulp business at the Fortress Specialty Cellulose Mill in Canada, which is also in the process of expanding into the renewable energy generation sector with the construction of a cogeneration facility. Fortress is also seeking to expand its dissolving pulp capacity with the recent acquisition of the Fortress Global Cellulose Mill at Lebel-sur-Quévillon, Qué., Canada, which it intends to convert into a dissolving pulp mill and where it also intends to restart a cogeneration facility.

The company operates its specialty papers business at the Dresden mill. Its security paper products business is at the Landqart mill in Switzerland, where it produces banknote, passport, visa and other brand protection and security papers, and at its Fortress Optical Facility in Canada, where it produces optically variable thin film.