LONGVIEW— Weyerhaeuser Co. has sold its NORPAC paper mill to One Rock Capital Partners, LLC, ending Weyerhaeuser’s nearly 90-year papermaking presence in Longview.
Weyerhaeuser said that it will use a substantial portion of the after-tax proceeds from the sale to pay off debt. The sale includes the printing papers mill located in Longview, which Weyerhaeuser has operated through a joint venture with Nippon Paper Industries Co., Ltd. Nippon’s 50 percent stake in the newsprint mill is included the sale.
While the price of the NORPAC sale wasn’t immediately available, Nippon reported that it sold its half of the company for $40 million.
“Customers of NORPAC have a high opinion of the quality of the products, in which state-of-the art technologies of both companies were incorporated, and NORPAC had performed well in terms of sales over the long term in the Japanese and U.S. markets,” Nippon said in a press release.
“However, NORPAC has faced a tough business environment, due to a decrease in demand for newsprint and stiff competition in the U.S. market. NORPAC has taken measures, including the cultivation of Asian markets, expansion in the sale of printing papers in the U.S. market, and the development of new products, in addition to thorough cost reductions,” the Japanese company added.
NORPAC produces newsprint and book paper. The newsprint market has been shrinking for decades as newspapers have closed and downsized. The Longview operation opened in the late 1970s as a non-union mill and was the last of the local paper facilities sold under Weyerhaeuser’s goal to get out of the papermaking business.
This announcement completes the company’s strategic review of the Cellulose Fibers business. The company recently announced the sale of its pulp mills and liquid packaging board business in Longview and elsewhere.
The sale leaves Weyerhaeuser still owning a sawmill and log export operation at the Longview plant site and, of course, more than a half million acres of timber in Cowlitz County.
“Through our strategic review of the Cellulose Fibers business we have enhanced the focus of our company and created significant value for Weyerhaeuser shareholders,” Doyle R. Simons, president and chief executive officer, said in a prepared statement. “We will continue to build on this strong foundation as we work together to be the world’s premier timber, land, and forest products company. We are proud of the contributions NORPAC employees have made to Weyerhaeuser and will continue to make in the future as part of One Rock.”
The transaction is subject to customary closing conditions and is expected to close in the fourth quarter of 2016. The NORPAC business will continue to operate independently of One Rock until the transaction closes.
Based in New York and Los Angeles, One Rock is a private equity firm founded in 2010 with $430 million in capital. One Rock specializes in buyouts of complex, lower or middle-market companies i.e. “corporate carve-outs, misunderstood companies, management transitions, and under-optimized businesses,” the company said on its website.
It’s invested in a variety of industries, including specialty manufacturing for the medical, food, auto retail and energy industries, in addition to investments in several landscaping companies. One Rock also added oil and gas to its portfolio in April, when one of its subsidiaries acquired Chevron’s U.S.A.’s refinery and retail locations in Hawaii.
However, it’s not clear where the company has any investments yet in the pulp and paper industry.