Neenah Paper, Inc. announced it has signed a definitive agreement to purchase certain premium brands, including Astrobrights and Royal, from Wausau Paper. The transaction has been approved by the Boards of Directors of both companies and is subject to customary closing conditions. The purchase would be financed through existing credit facilities and operating cash flows. Closing is expected to occur on January 31, 2012 and additional details will be shared at that time.
"The purchase of these profitable brands is consistent with our stated intent to participate in the consolidation of the premium paper category when it can create significant value for our shareholders with minimal investment," said John O'Donnell, Chief Executive Officer. "The timing of this opportunity enables us to improve returns through greater utilization of our existing asset base and growth in new channels such as retail. In addition, our strategy and commitment remains to generate value by expanding in growth categories outside of paper."