Powerflute Oyj recently announced that it has agreed to dispose of its interests in the Papierfabrik Scheufelen group of companies (together "Scheufelen") which represent the Group’s entire interest in coated woodfree papers and the whole of the Graphic Papers business segment, to Paper Excellence BV ("Paper Excellence"), a privately owned pulp and paper producer, for total consideration of €38.5m, comprising cash consideration of €32.5m payable in two instalments (€25.0m at completion and €7.5m on 31 October 2011) and the assumption of €6.0m of debt by Paper Excellence.
Commenting on the disposal, Dermot Smurfit, Chairman of Powerflute said: "We are pleased to announce the disposal of Scheufelen to Paper Excellence and believe this represents a successful outcome for both the customers and employees of Scheufelen and for Powerflute’s shareholders. Scheufelen will benefit as part of an integrated pulp and paper group and will continue to prosper under new ownership. Powerflute has achieved a significant return on its investment in a little over two years – a strong validation of our business strategy. On completion of the disposal, Powerflute will be debt free on a net basis and will have the capital structure and resources to continue to pursue its strategy of seeking opportunities to acquire underperforming businesses in the paper and packaging sectors."
