KPS making 4.5x its money with Expera sale

  • KPS combined specialty-papers businesses of Wausau Paper, Packaging Dynamics to create Expera
  • Expera paid out $70 mln dividend in 2016
  • KPS sold American & Efird to Platinum this year

KPS Capital Partners is making 4.5x its money with the sale of Expera Specialty Solutions LLC, a source said.

Ahlstrom-Munksjö Oyj said July 23 that it agreed to buy Expera in a deal valued at $615 million. The Helsinki company said adding Expera would triple its sales in the U.S. and provide a platform for growth.

The acquisition will also provide one-time cost savings of 7 million euros ($10 million) by the end of 2019, Ahlstrom-Munksjö said.

Expera is the Kaukauana, Wisconsin, maker of specialty paper products for industrial and technical, food packaging and processing as well as pressure-sensitive release liner sectors.

The company employs about 1,800. The sale is expected to close in the second half.

KPS created Expera in 2013 when it combined the specialty-papers businesses of Wausau Paper and Packaging Dynamics Corp.

The New York buyout shop used its third fund, which originally closed at $1.2 billion in 2007. KPS ended up raising $800 million in additional capital that brought total commitments for Fund III to $2 billion, Buyouts has reported.

“KPS was the only investor with the vision to recognize that two challenged businesses could have a stronger future together, creating one of the leading specialty paper businesses in North America,” said Russ Wanke, Expera’s CEO, in the statement.

Expera paid out a $70 million dividend to KPS in 2016, Moody’s Investors Service said.

During KPS’s ownership, Expera more than doubled its profitability, said Raquel Palmer, a KPS partner, in a statement.

The exit is the latest for KPS this year. The New York buyout shop sold American & Efird to Platinum Equity earlier this year, making 3x its money, Buyouts said. KPS also sold Electrical Components International to Cerberus Capital Management in April.

Angelo Bonvino and Erika Detjen of Paul, Weiss, Rifkind, Wharton & Garrison was legal counsel to KPS/Expera. Deutsche Bank and Barclays served as financial advisers.

Action Item: Contact Russ Wanke at +1 920-766-4611