Buckeye Technologies (USA) acquiring UPM-Kymmene's Walkisoft business

Buckeye Technologies Inc. and UPM-Kymmene Corporation today announced that they have signed a letter of intent for Buckeye to acquire essentially all of the assets of Walkisoft, UPM-Kymmene's nonwovens business, for approximately USD 120 million.
This acquisition doubles Buckeye's nonwovens capacity (to about 85,000 tons) enabling it to better meet the growing demand for these advanced absorbent products. Walkisoft's acquired capacity totals some 40,000 tons. Its 1998 annual sales amount to approximately 80 million US dollars.
Detailed terms of agreement were not disclosed; however, the acquisition funding will involve installment payments to UPM-Kymmene over the next four years. The transaction, which is expected to close by this Fall, is subject to completion of due diligence, regulatory approvals, and other terms of the agreement.
Buckeye Chairman, Robert E. Cannon commented, "The acquisition of Walkisoft is a logical next step in the growth of our absorbent products business. Buckeye will acquire operations in the United States and Germany, two of the world's largest markets, where we do not currently have nonwovens manufacturing facilities. Importantly, Walkisoft provides us with immediate capacity to fill increasing demand and bridge the gap until Buckeye's previously announced large, new machine is in operation. Together, these expansions will provide the critical mass needed to support an even broader R&D program and yield economies that will further accelerate the growth of our nonvowen products in existing and new applications."
From UPM-Kymmene's point of view, the divestiture of its nonvowens business is a natural consequence of UPM-Kymmene's strategy to concentrate on its core businesses. The company believes that this arrangement ensures good prospects for Walkisoft's future development.
Buckeye currently has nonwovens operations in Delta, BC, Canada, and Cork, Ireland, with research and development operations in Memphis, TN, USA. The Walkisoft acquisition will add manufacturing facilities in Steinfurt, Germany, and Charlotte, NC, USA, as well as engineering, research and development operations in Finland.
Buckeye is a leading manufacturer and marketer of specialty cellulose and absorbent products. Its products are sold worldwide to makers of consumer and industrial goods. UPM-Kymmene is globally one of the leading suppliers of printing papers, converting materials and wood products.
For further information:
UPM-Kymmene: Mr. Pentti Kallio, General Manager, Walkisoft,
tel. +358 400 437 833 (mobile) until 1.30 p.m.
Buckeye: Mr. Frank McGrew, Financial Contact, tel. 901 320 8510
Ms. Sondra Dowdell, Media Contact, tel. 901 320 8244 (Memphis, Tennessee)