Virtus Holdings Acquires Appleton Coated, Receives $4M Loan to Purchase Equipment
Appleton Coated, a leader in the coated paper industry, has been purchased by Virtus Holdings LLC, a new company formed by members of Appleton Coated's management team.
Virtus Holdings purchased the company from a subsidiary of Sequana SA, which had been the company's ultimate parent. The sale was effective Dec. 19. The Fox Valley company will continue to operate under the name Appleton Coated LLC, with no substantial business, personnel or operational changes planned for the immediate future.
"We are excited about our plans for the future of the company and are very grateful to our customers, suppliers and employees who have stood with us through the sales process," stated Doug Osterberg, Appleton Coated's CEO. "Additionally, this now makes Appleton Coated an American-owned company.
"Market conditions have been challenging in the coated freesheet industry in recent years, but Appleton Coated's customer focus, rigorous cost management and new business development initiatives have allowed us to meet the challenge," he continued. "Our focused strategies in coated freesheet, along with our new business development efforts are proving successful. We remain firmly committed to the coated freesheet segment, but have substantively diversified our product portfolio with over 40 percent of revenue now generated from products outside of the traditional coated freesheet segment."
To assist the management team with the acquisition, the Wisconsin Economic Development Corporation (WEDC) is providing Appleton Coated with a $4 million loan for the purchase of equipment.
The company will be required to maintain the existing 570 jobs and create 27 new jobs under the terms of the loan. Up to $1 million of the loan may be forgiven depending on how many jobs are created and retained over the next five years.
"WEDC is pleased to play a key role in helping the management team of Appleton Coated ensure that the company remains successful for years to come," said Reed Hall, secretary and CEO of WEDC, the state's lead economic development organization. "The paper industry is a critical part of the past, present and future in the Fox Valley, and WEDC's support will help ensure the industry's strength."
Appleton Coated entered the North American coated freesheet market in 1996 with the introduction of its Utopia brand and is currently the fourth-largest producer in that market. The company distinguishes itself in the coated freesheet market through focus on the premium end, superior service and flexibility, and leadership in environmental papers and coated papers for high-speed inkjet web printing technology. In recent years, the company has become known as an innovator in collaborative product development and partnerships, and has diversified into several uncoated, specialty and technical product segments.
Appleton Coated's corporate headquarters and manufacturing facility are located in Combined Locks, Wisc. The manufacturing facility has an annual production capacity of 400,000 tons on three paper machines, and an adjacent coating and finishing complex with processing capacity of 280,000 tons. The company employs about 570 workers, including approximately 400 employees represented by the USW Local 2-144.
In conjunction with the transaction, Appleton Coated has acquired financing in the form of an asset-based revolving credit facility with PNC Bank, N.A.
About Appleton Coated
Appleton Coated is a manufacturer and distributor of coated, uncoated, specialty and technical papers sold under the Utopia, Curious Collection, and Altima brand names. The company's products are used in high-end commercial printing, textbook publishing, label papers, transactional printing and a variety of specialty and custom applications. Selling through a chain of highly respected paper distributors, the company serves corporations, publishers, printers, converters and graphic designers in North America. For more information, visit www.appletoncoated.com.