JAY — Wausau Paper Mills Co. announced Wednesday a tentative agreement to buy Otis Specialty Papers for $58 million.
The Wisconsin-based maker of printing, writing and technical specialty papers said it has signed a letter of intent with Otis’ parent company, Rexam Inc., a unit of Rexam PLC of London.
Otis, which has 300 employees at its Jay mill, produces 70,000 tons of specialty paper a year, including kraft release base paper used in peel-off labels and thermal papers designed for imaging and other uses.
Daniel D. King, president and chief executive officer of Wausau, described the Otis acquisition as “an excellent fit with our Rhinelander Paper Co. division, adding over 40 percent to our technical paper-making capacity.”
Michael Luciano, human resources manager at Otis, agreed, noting that the two operations had a similar customer base.
“The Rhinelander mill was one of our chief competitors,” said Luciano, who indicated that the deal was expected to win regulatory approval.
King predicted that the Otis mill would play a key role in the growth of Wausau’s business.
“The Otis facility brings special manufacturing capabilities that will provide new product opportunities, production and scheduling efficiencies and geographical advantages to allow us to better serve our customers,” he said.
King said he foresees no major changes at the Jay operation, which has two paper machines. The deal is expected to close within 60 days.
Otis would be the second Maine paper mill to change hands within the past few months. Mead Corp., of Dayton, Ohio, recently completed a $640 million purchase of a coated paper mill in Rumford from Idaho-based Boise Cascade.
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