- The stock price of Verso Corp (NYSE: VRS) increased by over 30% pre-market today. This is why it happened.
The stock price of Verso Corp (NYSE: VRS) increased by over 30% pre-market today. Investors are responding to acquisition news.
Investors responded to Sweden-based BillerudKorsnäs announcing it would buy Verso for approximately $825 million in cash. BillerudKorsnas is pursuing the deal as part of a plan to expand into North America.
BillerudKorsnäs is going to finance the acquisition through a combination of a rights issue of up to 3.5 billion crowns (about $382.5 million), additional debt, and operating cash flow.
For the 12 months ended September 30, Verso reported sales of $1.26 billion and an adjusted operating profit of $158 million.
“With the support of our talented team, Verso has successfully streamlined our operations and reduced costs while strategically investing in projects to enhance our ability to support our customers. This transaction builds upon our considerable progress and better positions the combined company to invest in our North American manufacturing capability, provide high-quality paper products to customers and accelerate growth.”
“This agreement follows careful consideration and negotiation led by the special committee of our Board which was formed following receipt of the unsolicited proposal earlier this year. Our full Board believes this transaction maximizes value for shareholders, who will receive a significant premium and immediate and certain value. In BillerudKorsnäs, we found a partner that shares our commitments to safety, quality, sustainability, and innovation and is uniquely positioned to recognize the value of our business. We are grateful for BillerudKorsnäs’ partnership over the past several months in reaching this compelling transaction, particularly amidst an uncertain and restrictive pandemic-related travel environment. We are excited to join forces with BillerudKorsnäs and benefit from enhanced opportunities as part of a larger, stronger organization.”
— Randy Nebel, President and Chief Executive Officer of Verso
“The combination of BillerudKorsnäs’ expertise in high-quality virgin fiber packaging materials and Verso’s attractive assets creates an excellent platform for long-term profitable growth. We will obtain cost-effective production of coated virgin fiber material in the Midwestern United States. We also plan to sequentially transform part of the business into paperboard production while continuing to serve the U.S. customers. Our investments will create new U.S.-based jobs in a growing market and accelerate the transition from plastic-based packaging materials to renewable sources.”
— Christoph Michalski, President and CEO of BillerudKorsnäs
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