Sappi to Acquire Cham Paper Group’s Specialty Paper Business

Sappi Ltd., South Africa, a global producer of dissolving wood pulp, specialty and packaging papers, graphic (printing and writing) paper, and biomaterials, this week announced that it had signed an agreement to acquire the specialty paper business of Cham Paper Group Holding AG (CPG), Switzerland, for CHF146.5 million (approximately $149 million).

The transaction includes the acquisition of CPG’s Carmignano and Condino Mills in Italy, its digital imaging business located in Cham, Switzerland (photo below), as well as all brands and know-how. It will be funded through internal cash resources. The transaction is conditional on the approval from certain competition authorities.  The acquisition is expected to be completed during the first calendar quarter of 2018.

The main benefits of the acquisition include:

• Supports Sappi’s diversification strategy and 2020vision to grow in higher margin growth  segments 
• Strengthens Sappi Europe’s specialty and packaging papers footprint and skills; adds 160,000 metric tons of specialty paper to company’s 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 EUR 183 million of sales and approximately EUR 20 million of EBITDA before taking into account synergies
• Builds on the investments currently underway to increase specialty paper capacity at the company’s Somerset, Maastricht, and Alfeld Mills 
• Unlocks the growth potential of the CPG specialty paper business.

Commenting on the transaction, Steve Binnie, CEO of Sappi Ltd., said that "this acquisition further strengthens Sappi’s specialty paper business both in Europe and globally by combining Cham’s strong brands and assets with Sappi’s global reach. This transaction will increase profitability and unlock the significant growth and innovation potential inherent within the specialty paper market. I am very pleased that we have taken another signification step towards realizing our Vision2020 goal."

Berry Wiersum, CEO Sappi Europe, added that "we are very excited about the possibilities this transaction opens up for Sappi as well as for Cham’s highly respected business. The products and brands which have been acquired are an excellent complement to our market offering, enabling us to offer our existing, as well as new customers in Europe, North America, and globally, a broader range of products coupled with excellent customer service."

The specialty paper business of CPG will continue to operate separately and independently from Sappi until clearances from the authorities are obtained.

The Cham Paper Group Holding AG is a leading manufacturer of coated specialty papers. The company was founded in 1657. Following the divestment of its specialty paper business, the company will focus on its real estate business and will operate under the name Cham Group.

Cham Paper’s Carmignano Mill (Carmignano di Brenta, Padua, Italy) is a non-integrated paper mill with two paper machines. The mill can produce 100,000 metric tons of paper annually and employs 210 people. Paper grades include C1S FlexPack, C1S Label Papers, Wet Glue and Self-Adhesive applications, and base paper for metallization.

Cham Paper’s Condino Mill (Borgo Chiese, Trento, Italy) is a non-integrated paper mill, with one paper machine. The mill employs 120 people and can produce 60,000 metric tons of paper per year. Paper grades include glassine (silicone base paper) and super calendared, uncoated flexible packaging papers.

Digital Imaging Business (Cham, Canton Zug, Switzerland) has a finishing plant located in Cham, Switzerland, in a 4,000 sq. meter industrial warehouse where the base papers from Condino or Carmignano mills are converted to produce 12,000 metric tons of digital imaging paper per year. The business employs 50 people.