Deals



Munksjö forms a world leading specialty paper company together with Ahlstrom’s Label and Processing business area


Posted: 30th October 2012 09:00

Ahlstrom Corporation has signed an agreement with EQT, the principal owner of Swedish paper producer Munksjö AB, to combine its Label and Processing business area with Munksjö AB to form a global leader in specialty papers ahead of a planned IPO on NASDAQ OMX Helsinki.
 
The new company will be called Munksjö Corporation and the transaction will be executed through two partial demergers: one consisting of the Label and Processing operations in Europe (LP Europe) and one in Brazil (Coated Specialties). 
 
In the first phase, Ahlstrom and EQT will establish Munksjö Corporation to acquire the operations of Munksjö AB in exchange for new shares in Munksjö Corporation.  The European operations of Ahlstrom’s Label and Processing business area are then separated through a partial demerger and transferred into Munksjö Corporation in exchange for shares in Munksjö Corporation to be distributed to Ahlstrom’s shareholders.
 
Following the transaction, current Munksjö shareholders (including EQT) will own approximately 29% of the new company, while Ahlstrom shareholders will own approximately 50%.  The remainder of the shares have been offered in a fully subscribed €100m directed share issue to institutional investors Varma and Ilmarinen as well as Ahlstrom and EQT, investing via its EQT III fund.
 
The planned combination is the natural step in Munksjö’s strategy to become a leading global specialty paper company, following the acquisition of Arjo Wiggins’ Decor, Abrasives, Thin Print Papers and Fine Art businesses in 2011.  It will lead to strengthened competitiveness and efficiency and bring added growth opportunities to the company, organically as well as strategically.
 
Munksjö Corporation will be a focused specialty paper company in attractive market segments. Munksjö Corporation will have strong market positions on all specialty paper markets, including the markets for decor papers, abrasive backing papers and release liners.
 
Combined, Munksjö Corporation will have a net sale of €1.3bn in 2011 and the new company will have approximately 3,300 employees and 16 production sites in Europe, Brazil and China.
 
JPD Capital Ltd acted as financial advisor on behalf of Munksjö AB.  JPD Capital Ltd is an independent boutique investment bank committed to creating exceptional value for its clients in finance and the forestry, process and energy industries.  JPD consists of experienced, industry leading M&A and strategic advisory experts.  SEB Enskilda Corporate Finance and Nordea also represented Munksjö and EQT. 
 
With two demerger processes, a cross-country merger and a subsequent listing, the transaction was relatively complex.  All parties had a common goal and worked together to solve the upcoming difficulties and issues in a pragmatic way.
Financial Advisor to Munksjö AB
JPD Capital Ltd Oy and Vision Hunters Ltd Oy
Chairman Rainer Häggblom commented:
"In the merger of Munksjö AB with Ahlstrom’s Label and Processing Division we were advising Munksjö from the very beginning of the assignment both in terms of developing the idea and facilitating the actual transaction.
 
The transaction is a major move in paper industry consolidation focused entirely on attractive niche specialty paper markets with underlying growth and becoming one of the global leaders in those technically demanding product markets.” 
Mr. Häggblomcan be contacted by email at rainer.haggblom@jpdcapital.com

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