Sappi buys speciality paper assets for $149m
The company’s shares were trading lower in early trade — but that could also be a result of rand strength
Paper and pulp group Sappi said on Tuesday it would acquire speciality paper assets from Cham Paper Group, in a $149m deal that will be settled in cash.
Switzerland-based Cham produces coated speciality papers used in a variety of applications including industrial goods, consumer goods and digital imaging.
The company said the transaction, which is expected to close in the first quarter, represented an opportunity to grow its speciality and packaging paper business.
Sappi is a leading global producer of dissolving wood pulp, which is used in the textiles industry, among others.
The company made dissolving wood pulp a key focus area as demand for its traditional mainstay products, such as newsprint and glossy magazine print, was waning.
The new Cham assets include a digital imaging paper business, which uses paper supplied by the two mills included in the deal.
Sappi’s share price was off 0.89% at R95.02 in early trade on the JSE, valuing the company at R53bn. It was among several rand hedges to fall in early trade, as the currency returned to levels last seen before the medium-term budget.