H2 picks up paper businesses from Norske Skog

The transaction, which is part of Norske Skog's effort to reduce net debt, was valued at around €30m.

Norske Skog CEO Sven Ombudstvedt said that profitability has been a challenge at Parenco for a long time, and that the owners had previously considered a sale or a closure of the paper mill.

H2 partner Harmen Geerts added that Parenco is well-positioned for growth and that strategic value is added by sourcing raw material from recovered paper business Reparco. More specifically, he stated, growth opportunities are driven by substitution to higher-quality magazine paper grades and growth in relevant publishing segments.

At the moment, only one of the two paper machines is in operation at the plant, but H2 aims to find a market to bring operation to full capacity again. If that fails, the GP has support from local work councils and trade unions to reduce headcount accordingly.

Debt
Debt was provided by ING.

Company
Parenco, constructed in 1987 and acquired by Norske Skog in 2001, produces magazine paper grades and standard newsprint from waste paper. The paper mill is based in Renkum, Netherlands, where it employs 265 staff.

Reparco, founded in 1956, supplies old newspapers to paper mills in Europe, China and the US. Based in Nijmegen, Netherlands, the company operates three recovered paper processing plants in Europe.

People
Geerts worked on the deal for H2. Parenco's interim general manager Frans Veersteg will be appointed managing director of the company. Kurt Martens, managing director of Reparco, will remain in his position.

Advisers
Equity - Houthoff Buruma (Legal); Deloitte (Financial due diligence, tax).

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