Suzano has signed a cash deal worth USD 110 million with Pactiv Evergreen Inc to buy its paper mill situated at Pine Bluff in Arkansas and its extrusion facility located in Waynesville, North Carolina. Suzano has agreed to offer employment to current employees at Pine Bluff and Waynesville.
Jul 15, 2024
Suzano S.A. has signed a definitive cash agreement worth USD 110 million with Pactiv Evergreen Inc to buy its paper mill situated at Pine Bluff in Arkansas and its extrusion facility located in Waynesville, North Carolina.
As per a release issued by Pactiv Evergreen, the USD 110 million cash deal is subject to customary adjustments for closing amounts such as working capital. The global paper and pulp producer has agreed to offer employment to current employees at Pine Bluff and Waynesville.
Pine Bluff produces liquid packaging boards and cupstocks used to make fresh beverage cartons, paper cups and other fiber-based food and beverage packaging. Waynesville provides incremental extrusion capacity for the board produced at Pine Bluff. Pactiv Evergreen and Suzano have also agreed to enter into a long-term supply arrangement at the closing of the transaction pursuant to which Suzano would use Pine Bluff and Waynesville to supply liquid packaging board to Pactiv Evergreen’s converting business.
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“The sale of Pine Bluff and Waynesville concludes the strategic alternatives review process. This transaction is consistent with our disciplined focus on value creation, and we expect it to reduce the capital intensity of our business, improve our cash flow profile and further strengthen our balance sheet,” said Mr. Michael King, President and Chief Executive Officer of Pactiv Evergreen.
“We put considerable thought into positioning Pine Bluff and Waynesville for the future and believe this agreement serves the best interests of our stakeholders and our local communities. I want to thank our Pine Bluff and Waynesville employees for their significant contributions to Pactiv Evergreen and continued dedication to our customers,” he added.
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The transaction is anticipated to close in the fourth quarter of 2024, subject to the satisfaction of customary closing conditions, including foreign antitrust approval. Based on the transaction’s estimated cash proceeds, the company currently expects to record a non-cash impairment charge of approximately USD 320 million to USD 340 million in the third quarter of 2024.
The company expects to provide updated guidance for fiscal year 2024, reflecting changes in management’s assumptions resulting from signing the Agreement, concurrent with its second quarter earnings.
UBS Investment Bank is serving as financial advisor to Pactiv Evergreen, and Debevoise & Plimpton LLP is serving as legal advisor.
