15 July 2018 Paper

Sequana sells papermaking to focus on Antalis

Eight ArjoWiggins paper mills have new owners as French group commits to distribution rather than production.

Sequana is selling its remaining paper manufacturing operations in order to focus on the Antalis paper and packaging distribution business.

Paper production under the Wiggins Teape brand has been gradually eroded comprising two UK miles and one each Spain France and China in the Creative papers arm and three French operations in the Graphic papers business. This includes Greenfield SAS the largest deinking pulp mill for graphic papers in Europe making ArjoWiggins Graphic the leading producer of recycled papers in Europe.

The UK operations include the Stonywood mill near Aberdeen, founded in 1770, and Chartham mill near Canterbury which specialises in translucent papers for design, tracing papers and for advertising wraps on newspapers.

A deal has been struck with Fineska, parent group of Eska, a Dutch company that focuses on board production used in luxury packaging, stationery, books, puzzles and board games. It operates two mills at Sappemeer and Hoogezand producing more than 250,000tpa from recycled paper. It reckons that more than 50% of the whisky boxes produced in the UK are made from Eska boards.

Private Equity investor Adlinger & Company which owns Eska, is also owner of specialist inkjet paper producer Crown Van Gelder, also in Holland. The deal has reached the exclusive negotiations stage, Sequana management having selected the bid in a competitive process as part of management review process.

It was important, says Sequana, that the deal “would also safeguard the futures development of ArjoWiggins Graphic and ArjoWiggins Creative Papers within a private investment group that has been supporting CVG and Eska – two renowned players in the speciality papers and graphic cardboard sectors – for a number of years”.

Antalis will continue to market the products including: Conqueror, Curious Collection, KeayKolour from the Creative division; Cocoon, MCS, Cycles from Graphic.

The gross amount of the transaction is expected to be €125 million which will leave Sequana with proceeds of around €20 million once debts have been settled. The businesses being sold employ 2,000 across eight mills. These generated sales of €528 million in 2017, 19% of the company’s overall €2.8 billion revenue. The paper making operations were extensively reorganised in 2014 and 2015, selling off the security papers arm and closing facilities in order to focus on speciality papers. As a consequence the divisions being sold are on target to generate a profit in 2018 after reporting a positive cash flow in 2017.

Once completed the only production arm remaining Sequana will be Arjobex, producer of HDPE labels. These are sold under the Arjobex Security brand and as Polyart.

While Antalis has been expanding through the acquisition of Igepa’s distribution business in Sweden and Norway last month and the earlier purchase of Alos in Sweden, a packaging productions distribution business in Sweden, it is also shedding parts of the business. It has sold its Southern African paper distribution companies in South Africa and Botswana.

The distribution giant has also completed a refinancing project which has included the refinancing of a €215 million factoring facility which followed the extension of a €285 million facility until the end of 2021.

Gareth Ward

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Greenfield mill

Greenfield mill

Among the facilities being sold to Eska is the Greenfield mill which produces the whitest recovered fibre pulp for use in the recycled papers that the ArjoWiggins group has made in Europe.

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