HELSINKI, Finland (News release) -- Stora Enso has signed an agreement to divest its sawn construction timber (KVH) mill at Pfarrkirchen in Germany, to the fund LEO II. - VV1 GmbH, managed by the private equity firm Dubag Group.
The divestment is part of Stora Enso's profit protection programme and it is in line with the Group's strategic transformation to focus on developing integrated mills for wood products production. Pfarrkirchen Mill has a good reputation on the market, is well equipped and holds a team of very competent personnel, but it is a non-integrated further processing mill. The new owner is in a better position to give the mill the attention it deserves and ensure a long-term development. The transaction is expected to be completed in the first quarter of 2020. The impact on Stora Enso's operational EBIT and net debt will not be material.
"We are proud that Stora Enso has chosen DUBAG Group and its LEO II. Fund as partner for a sustainable future of the KVH production site in Pfarrkirchen and for the carve-out from Stora Enso. The Pfarrkirchen site and its 90 employees have a long-lasting experience in the production of high quality KVH and we are looking forward to continue this successful history in the future," says Christoph Mödder, Partner at DUBAG Group.
The divestment is expected to reduce Stora Enso's annual sales by EUR 40 million. It will also reduce Stora Enso's KVH production capacity by approximately 145 000 m3.