US-based Martland has acquired Aylesford, which is one of three UK mills making recycled newsprint, for a nominal consideration.
There has been some speculation in the waste paper industry that Aylesford Newsprint might become a casualty in the current market downturn with ongoing reductions in the demand for newsprint as newspaper sales generally fall. Local authorities and waste management companies are major suppliers of used newspapers and magazines to the mill.
However, now the sale to Martland without debt is seen as giving the mill a fresh opportunity. The company, until today (October 2) was owned by Swedens SCA and South Africas Mondi. The pair are thought to have had some disagreements about options for the business and recently SCA had said it wished to concentrate on the tissue sector while Mondi has highlighted the losses at the plant.
Today, SCA said that it had divested its 50% shareholding in the UK-based newsprint facility Aylesford Newsprint to the private equity company Martland Holdings.
AnSCA statement continued: The company has 280 employees and its annual capacity is approximately 400,000 tonnes of recovered fibre-based newsprint. Total sales for 2011 were approximately SEK 1.6bn (GBP 150m). The operations have been loss-making for the past years.
Debt-free
The sale of shares was carried out on a debt-free basis for a symbolic amount. The transaction involved a book loss of SEK 850m (GBP 80m) and a negative cash flow effect of SEK 140m (GBP 13m) for SCA. The loss will be booked in the third quarter of 2012.
A statement from Mondi said that Immediately prior to completion, the Company [Aylesford Newsprint] was re-capitalised, with the proceeds used to repay in full its interest bearing debt and leave net cash of GBP23 million. For the year ended 31 December 2011, Aylesford Newsprint generated negative EBITDA before special items of GBP4 million and net loss before special items of GBP16 million. Immediately before completion, Aylesford Newsprint pro forma gross assets amounted to approximately GBP99 million.
Mondi Group CEO David Hathorn said: “This disposal allows us to continue to focus on our core businesses, while creating an opportunity for Aylesford to continue supplying newsprint to the major national newspaper groups in the UK.”
Investment holding company
The Martland Holdings, LLC describes itself as a US-based investment holding company engaged in acquiring non-core divisions of large corporations worldwide and private companies with revenues ranging between 5 million and 1 billion.
On its website it states: We are interested in acquiring companies domiciled in Europe, the United States or Africa and invest in all industries. Our preferred minimum investment horizon is 5 years. However, for a selected number of situations our investment horizon can become permanent.
Martland Holdings executive director Landry Kouakou said ‘We are pleased to partner with Aylesford Newsprint’s management and employees for the future success of the company. Aylesford Newsprint’s quality industrial asset combined with a strong balance sheet will allow us to build long-term value under current market conditions.’
Forest
The board of Martland Holdings includes as a director, Krister Rosenqvist-Packaln, who serves as the President of Cleantek Trade. He has 25 years in various management positions within the Finnish forest industries either in Europe (his own sales office in France until 1995 and sold it to Stora Enso), in Asia or in the United States.
Martland said Mr Rosenqvist-Packaln has “successfully turned around Stora Enso packaging production sites in Wisconsin and run sales and marketing positions within Europe in the publication and fine papers departments of leading Finnish paper companies. He has now built in 2009 a company that focuses on sourcing biomass for large utilities, mostly in Europe.
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