New York private investment firm Apollo Management has agreed to buy a division of International Paper for approximately $1.4 billion (€1.1 billion).
Apollo will execute the deal through a holding company called CMP Holdings. The division being acquired makes coated and supercalendered papers and includes the Advocate and Influence brands, among others. The division includes four paper mills in the US and generated $1.6 billion in sales in 2005.
As part of the transaction, International Paper will buy a $30 million, 10-year limited partnership interest in CMP Holdings, which will give the conglomerate the right to receive certain additional payments contingent on CMP’s achievement of set performance hurdles.
International Paper, based in Stamford, Connecticut, is in the process of unloading roughly $9.1 billion in non-core divisions.
Apollo’s Scott Kleinman led the deal. In a statement, Kleinman indicated that Apollo is sill seeking to identify a “strong management team” to install in the coated papers business.