International Paper to sell stake in Ilim to Russian partners for $484 mln

MOSCOW. Jan 26 (Interfax) - International Paper has entered into an agreement to sell its 50% interest in Ilim SA, the holding company for leading Russian pulp and paper producer Ilim, to its partners in the joint venture for $484 million, the U.S. company said.

The company did not name its partners in the joint venture. It was reported earlier that the other 50% of Ilim SA is controlled by Zakhar Smushkin and brothers Boris and Mikhail Zingarevich. International Paper acquired its stake in Ilim SA in 2007 for $650 million.

The transaction indicates an approximate total enterprise value (TEV) of $3.5 billion for Ilim based on an approximate 3.1X EBITDA multiple on 2022 full-year results. Unaudited EBITDA for 2022 was $1.11 billion; the unaudited TEV includes $2.45 billion net debt.

The sale is subject to regulatory approvals in Russia, the company said.

Ilim SA owns 96.37% of JSC Ilim Group. International Paper owns 2.39% of the group's shares directly and the JV partners have indicated interest in acquiring them for $24 million on terms and conditions to be agreed, the company said.

Ilim, Russia's largest pulp and paper company, exports 70% of its products. The group has a 75% share of the commercial pulp market in Russia, and 20% and 10%, respectively, of the cardboard and paper markets. The group is headquartered in St. Petersburg and its production facilities are located in Arkhangelsk, Irkutsk, Leningrad and Moscow regions.

International Paper, the world's largest pulp and paper company, manufactures corrugated cardboard packaging, as well as pulp for diapers, tissue and other personal care products. The company's headquarters are in Memphis, Tennessee and its manufacturing operations are located in North America, Latin America, North Africa and Europe.