London- and New York-based private equity firm Rhone Capital has agreed to buy Arizona Chemical, the pine chemical division of Memphis, Tennessee-based forest products giant International Paper, for approximately $485 million (€367 million), International Paper said in a statement.
The sale allows International Paper to acquire a 10 percent minority interest in the acquisition vehicle to be formed by Rhone.
Based in Jacksonville, Florida, 75-year-old Arizona Chemical produces pine chemicals for adhesives, inks and coatings and oleochemicals, the statement said. It has manufacturing facilities in Florida, Georgia and Ohio, as well as in England, France, Finland and Sweden.
The transaction comes as International Paper has agreed to sell its beverage packaging division to beverage packaging unit to Carter Holt Harvey, an Australian forest products manufacturer, for approximately $500 million (€378.7 million), the statement said.
Led by vice president and general manager Scott Murchison, the beverage packaging unit has “beverage converting facilities” in Massachusetts, Michigan, North Carolina, Florida and California, as well as in Ontario and Quebec, Canada, the statement said. It also includes Evergreen Packaging, a designer and manufacturer of packaging machinery located in Iowa, and the Pine Bluff Mill in Arkansas. Divisions are also located in China, South Korea, Latin America, Israel and Saudi Arabia.
“The business employs approximately 3,000 employees and produces more than 680,000 tons annually of high-quality packaging for juice, dairy and other products, and coated groundwood paper,” the statement said, adding that its net sales totaled approximately $860 million in 2005.
Carter Holt Harvey supplies building materials, pulp, paperboard and packaging to Australasia, the statement said. “CHH’s building supplies division operates a number of large scale, integrated, low cost sawmill, wood processing and panels facilities in Australia and New Zealand,” the statement said.
International Paper, which is more than 100-years-old and has customers in the US, Europe, South America and Asia, has sold off a number of its businesses recently. Kohlberg & Company, a private equity firm based in Mount Kisco, New York, bought its industrial paper business for $180 million in March of 2005. Apollo Management, a firm based in New York City, bought its coated paper division in 2006 for approximately $1.4 billion in June.
“These agreements bring us close to completing the divestitures planned as part of our transformation,” John Faraci, the chairman and chief executive officer of International Paper, said in the statement.
The two most recent transactions bring the total value of the sales to approximately $11 billion.