Glatfelter (York, Penn., USA) on Tuesday (Aug. 21, 2018) announced it has entered into a definitive agreement to sell its Specialty Papers Business Unit (SPBU) on a cash free and debt free basis to Lindsay Goldberg (the "purchaser") for a total sale price of $360 million. The sale price includes approximately $320 million of cash proceeds and the assumption by the Purchaser of approximately $40 million of retiree healthcare liabilities.

 

The purchase price is subject to a customary working capital adjustment mechanism, as well as an adjustment for the retiree healthcare liabilities that the purchaser will assume. In addition, the purchaser will assume approximately $250 million of pension liabilities relating to SPBU employees and receive approximately $300 million of related assets from Glatfelter’s existing pension plan. The pension liability remaining with Glatfelter will continue to be significantly overfunded and no cash contributions are expected for the foreseeable future. Net sales for SPBU for the 12 months ended June 30, 2018, were approximately $783 million.

"The divestiture of our Specialty Papers Business Unit represents a significant milestone for Glatfelter as we continue our transformation toward becoming a leading global engineered materials company. We are focused on enhancing shareholder value by devoting our investments and resources to accelerating the growth potential of our Composite Fibers and Advanced Airlaid Materials business units," said Dante C. Parrini, Chairman and CEO of Glatfelter. "We believe the sale of SPBU to Lindsay Goldberg creates an excellent opportunity for the business and its employees, who have remained steadfast in their dedication to Glatfelter and our customers."

Net cash proceeds from the transaction will be used to pay down debt, to fund the previously announced acquisition of Georgia-Pacific’s European nonwovens business, and for general corporate purposes. The transaction is expected to close during the fourth quarter of 2018, subject to satisfaction of customary closing conditions.

As announced in February, the Glatfelter Board of Directors and management team commenced a review of potential strategic alternatives for the Specialty Papers business unit as part of their ongoing commitment to maximizing shareholder value. This definitive agreement represents the successful conclusion of that review process.

Credit Suisse is serving as financial advisor and Shearman & Sterling as legal advisor to Glatfelter on the transaction.