New Sherbrooke Plant Doubles its Tissue Paper Capacity

Pixelle Specialty Solutions Holding LLC announced that it has signed a definitive agreement to be acquired by an affiliate of H.I.G. Capital. Terms of the transaction were not disclosed. Pixelle was formed in 2018 by Lindsay Goldberg, a private investment firm that focuses on partnering with families, founders and management teams seeking to actively build their businesses. Pixelle has built an industry-leading four-mill specialty paper platform with mills in Chillicothe, OH; Jay, ME; Spring Grove, PA; and Stevens Point, WI. Collectively the mills operate 11 paper machines and produce more than one million tons of paper annually. Timothy Hess, Pixelle’s Chief Executive Officer, said, “Together with Lindsay Goldberg, Pixelle has developed a broad, innovative portfolio of industry leading brands across the specialty papers and sustainable packaging markets. In under four years, we have transformed Pixelle into the leading specialty-focused paper producer in North America through three strategic acquisitions and successful implementation of a continuous improvement program. We thank Lindsay Goldberg for their partnership and look forward to our next chapter with H.I.G. Capital.”

Mondi plc announces that it has entered into an agreement to sell its last remaining facility in Russia, Joint Stock Company Mondi Syktyvkar, together with two affiliated entities to Sezar Invest LLC for a total cash consideration of RUB 80 billion to be paid in a series of instalments as set out below. The Business employs approximately 4,500 people and is a leading provider of uncoated fine paper and containerboard to the domestic Russian market.

*Q2 2024 net loss from continuing operations was $14.5 million or $0.08 per share (diluted), compared to net loss of $13.4 million or loss of $0.08 per share (diluted) in Q1 2024. Adjusted EBITDA for Q2 2024 was negative $12.1 million compared to negative $3.5 million in Q1 2024. Both the lumber and paper operations had a negative contribution to Q2 2024 as a result of weak market conditions. *Lumber sales volumes in Q2 2024 were lower than Q1 2024 due to the continued drag on lumber demand as housing affordability remains significantly impacted by high mortgage rates. There also remain an oversupply of lumber, which resulted in lower field takeaways. Average realized lumber prices of $637/mfbm for Q2 2024 were also lower than the $644/mfbm pricing realized in Q1 2024. Benchmark prices continued to be under pressure subsequent to Q2 2024. The recent cuts by the Bank of Canada is signalling a reversal in monetary policy. *The valuation provision for lumber and log inventory was increased to $3.2 million from $1.0 million at the end of Q1 2024, generating a $2.2 million charge to lumber cost of sales in Q2 2024. *Our lower duty rate has positively impacted the Company’s earnings and free cash flow since August 1, 2023. The Company’s initial duty deposit rate, totaling 20.23%, remained in effect for almost two years, since the Company’s acquisition of its sawmill and paper mill assets on August 28, 2021. *The Company plans to complete a spin-out transaction of Kap Corporation (“Kap”), the holding company of Kap Paper Inc., which holds all operating assets related to the paper mill operations.