KP Tissue Sets IPO Pricing

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KP Tissue Inc., Mississauga, Ont., Canada, this week agreed to the initial public offering of 8,000,000 common shares at a price of $17.50 per share, for total gross proceeds of approximately $140 million. The proceeds will be used by the company to subscribe for 8,000,000 units (15.7% interest) of Kruger Products L.P., Montreal, Que., Canada.

KP Tissue was created with the sole purpose of acquiring an equity interest in Kruger Products, initially, with the proceeds from the proposed initial public offering of its common shares. Kruger Products produces tissue products for household, industrial, and commercial use. It operates five tissue mills, four of which are located in Canada and one in the U.S., with some 2,300 employees across North America. Kruger Products currently is a wholly-owned subsidiary of Kruger Inc.

The public offering is being made through a syndicate of underwriters led by Scotia Capital Inc., as sole bookrunner, National Bank Financial Inc., RBC Dominion Securities Inc. and TD Securities Inc., and also includes CIBC World Markets Inc., Desjardins Securities Inc., HSBC Securities (Canada) Inc., and Canaccord Genuity Corp.

These underwriters have also been granted an over-allotment option to purchase from the company up to an additional 15% of the number of common shares issued under the offering. If the over-allotment option is exercised, the company will use the proceeds from the sale of these additional shares to subscribe for additional units of Kruger Products, which will result in KP Tissue having up to a 17.6% interest in Kruger Products.