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Verso (VRS) Gets Shareholders' Nod for Merger Agreement

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Verso Corporation recently declared that its shareholders have approved the previously-announced merger agreement with BillerudKorsnäs AB and other related proposals.

The merger deal got approval by roughly 98.5% votes cast, which signifies approximately 73% of Verso's outstanding common shares. Verso and BillerudKorsnäs expect the merger to close in the later part of this month or April, subject to the satisfaction of customary closing conditions. Shares of the company are up 0.3% since the announcement of shareholder approvals on Mar 11.

In December, Verso entered into this agreement per which, BillerudKorsnäs had agreed to acquire all outstanding shares of the company for cash payment of $825 million. Verso will enable BillerudKorsnäs to expand its footprint in North America while and provide growth scopes for the next 10 years and beyond.

BillerudKorsnäs plans to build one of the most cost-effective and sustainable paperboard platforms in North America by converting Verso's several assets into paperboard machines. It will convert the company’s largest facility, Escanaba Mill, into a top-notch, sustainable and fully-integrated paperboard production site.

Through this deal, the newly-formed company will be well positioned to invest in Verso’s North American manufacturing capability, offer high-quality paper products to customers and accelerate growth. This transaction maximizes Verso’s shareholders value with considerable premium and immediate and certain value.

The combined company will be one of the largest providers of virgin fiber paper and packaging. BillerudKorsnäs' proficiency in high-quality virgin fiber packaging materials and Verso's efficient assets base will generate long-term profitable growth.

Verso recently reported fourth-quarter 2021 results. Adjusted earnings per share of 73 cents beat the Zacks Consensus Estimate of 67 cents and marked a turnaround from a loss of $1.84 per share in the prior-year quarter, driven by improved sales and operations. Revenues of $328 million surpassed the Zacks Consensus Estimate of $298 million and rose 4.5% year over year. This was aided by favorable price/mix, partially offset by $43 million in declined sales, primarily attributable to the sale of Duluth and idled Wisconsin Rapids mills.

Price Performance

In the past year, Verso’s shares have soared 77.1% against the industry’s decline of 10.9%.

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Zacks Rank & Stocks to Consider

Verso currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are The Mosaic Company (MOS - Free Report) , AdvanSix Inc. (ASIX - Free Report) and Allegheny Technologies Incorporated (ATI - Free Report) .

Mosaic has a projected earnings growth rate of 106.4% for the current year. The Zacks Consensus Estimate for MOS' current-year earnings has been revised upward by 22.2% in the past 60 days.

Mosaic beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed once, the average surprise being 3.7%. MOS has rallied around 87.3% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AdvanSix has a projected earnings growth rate of 30.6% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 25% upward in the past 60 days.

AdvanSix beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, while missing once, the average surprise being 23.6%. ASIX has surged 57.3% in a year. The company currently carries a Zacks Rank #2 (Buy).

Allegheny, currently carrying a Zacks Rank #2, has an expected earnings growth rate of 661.5% for the current year. The Zacks Consensus Estimate for ATI's earnings for the current year has been revised upward by 45.6% in the past 60 days.

Allegheny beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, the average surprise being 127.2%. ATI has rallied around 21.3% over a year.


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