Packaging Dynamics to Sell Thilmany Papers

Packaging Dynamics Corp. announced earlier this week that it had agreed to sell its Thilmany Papers business unit to KPS Capital Partners. Financial terms were not announced. Included in the deal are the Thilmany Papers’ Nicolet and Kaukauna mills and Wausau Paper’s Mosinee and Rhinelander mills, all of which are located in Wisconsin, as well as the output of Verso Paper’s number five paper machine in Jay, Maine, a release dated April 22 said.

PRESS RELEASE

Packaging Dynamics Corporation (“Packaging Dynamics”), a leader in
flexible packaging and specialty papers, today announced the signing of a definitive agreement to sell its
Thilmany Papers business unit to a new company to be formed and controlled by investment funds sponsored by
KPS Capital Partners L.P. (“KPS”).
Wausau Paper has previously announced that it had signed a non-binding Letter of Intent to sell its Specialty
Paper business to this new company being formed by KPS.
Following the closing of these transactions, the new company will include Thilmany Papers’ Nicolet and
Kaukauna mills and Wausau Paper’s Mosinee and Rhinelander mills, all of which are located in Wisconsin, as
well as the output of Verso Paper’s number five paper machine in Jay, Maine.
Roger Prevot, CEO of Packaging Dynamics, commented, “This is truly an extraordinary opportunity to contribute
our Thilmany Papers business to form a larger specialty papers company that will deliver lasting value to
customers, employees and to the communities in which it operates, and for us to focus exclusively on our
attractive downstream packaging and converting businesses.”
Seth Hollander, a partner at Kohlberg & Company, commented, “We are pleased that our efforts to transform
Thilmany’s mill operations and to build a world-class organization have positioned the paper business to make
this next step in its evolution.” Kohlberg & Company acquired Thilmany from International Paper and
subsequently combined it with Packaging Dynamics. Hollander added, “We look forward to operating Packaging
Dynamics as a focused leader in its food packaging and specialty laminations end markets and continuing to grow
those businesses organically and through additional acquisitions.”
Russ Wanke, Vice President and General Manager of Thilmany Papers, commented, “Our team here at Thilmany
is proud to be playing a critical role in the creation of a major new Wisconsin-based company. By combining
Thilmany and Wausau’s Specialty Paper Business, we and KPS are establishing one of the leading specialty paper
companies in North America. We believe the combination will result in a company with the product breadth and
customer reach to capitalize on the growing worldwide demand for specialty papers.”
Closing of the Thilmany Papers transaction is conditioned upon the completion of the Wausau transaction,
ratification of a new collective bargaining agreement between the new company and the United Steel Workers,
required regulatory clearances, and certain other customary closing conditions. While Packaging Dynamics
expects to finalize the transaction in mid-2013, there can be no certainty or assurance about the timing, specific
elements or completion of a transaction.
About Packaging Dynamics
Packaging Dynamics is a leading flexible packaging and specialty papers company providing innovative solutions
to customers in each of its four business units – BagcraftPapercon, International Converter, De Luxe and
Thilmany Papers. Packaging Dynamics is a portfolio company