US-based Catalyst Paper Corporation will acquire the Biron paper mill and the Rumford pulp and paper mill for around $74m.
The company has entered an asset purchase agreement with NewPage Corporation, NewPage Wisconsin System and Rumford Paper Company for this acquisition.
With the acquisition, Catalyst's production capacity will increase by about 65% or 995 thousand tonnes annually.
Speaking about the deal, Catalyst president and CEO Joe Nemeth said: "With this Transaction, Catalyst will be better able to serve new and existing customers through operational synergies and a more diversified and higher value suite of products.
"Our acquisition of these US pulp and paper mills, once complete, will support our efforts to improve our balance sheet and enhance the Company's long-term competitiveness."
Catalyst plans to finance the acquisition through a combination of under its revolving asset-based credit facility.
The company also plans to effect a $25m offering of additional PIK toggle senior secured notes.
Completion of the deal will depend on customary closing conditions including the completion of the acquisition of NewPage Holdings by Verso Paper apart from the execution of a transition service agreement, materials and service supply agreements, and certain other ancillary agreements relating to the deal.
The mill at Biron Wisconsin has a capacity of 355000 tonnes for lightweight coated and ultra-lightweight coated paper.
The Rumford Maine mill can produce up to 510000 tonnes paper with coated specialty, coated freesheet and coated groundwood paper and 130 thousand tonnes Kraft market pulp capacity to produce both hardwood and softwood pulp.
