White Birch Paper Acquires SP Newsprint for $350M

Date: January 18, 2008

Source: News Room

SP Newsprint Co, a privately held producer and recycler of newsprint, said it agreed to be bought by affiliates of Peter Brant, who is the controlling shareholder of White Birch Paper Co, for $350 million in cash. SP Newsprint is owned in an equal, general partnership by affiliates of Cox Enterprises Inc, Media General Inc and The McClatchy Co. McClatchy recently acquired the even larger Knight-Ridder newspaper chain requiring considerable debt. White Birch is the second largest producer of newsprint in North America. SP is the fifth largest producer of newsprint and the second largest producer of 100 percent recycled newsprint. SP produces about 1 million metric tons annually for which it generated sales of $638 million in 2006, the latest year for which figures are available. Industry consolidation is being driven in part by a declining newsprint market from lower newspaper demand, which fell 20 percent in 2006. But, economies-of-scale are at work too. According to Brant, who serves as chairman and chief executive officer of White Birch Paper, "SP Newsprint's world-class assets, power generating facilities and recycling organization present a compelling opportunity. This acquisition is expected to broaden our geographic ability to supply our U.S. and foreign customers and provide White Birch Paper with a strong platform to expand in the recycling business."

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