IP to sell Russian joint venture

International Paper (IP) has agreed to sell its stake in the Ilim joint venture (JV) in Russia. The US-based firm will sell the 50% interest to its JV partner Ilim Holding for an equity value of $484 million.

IP said the transaction indicates a total value for Ilim of around $3.5 billion. This is based on an EBITDA multiple of x3.1 on the Russian firm’s full-year 2022 EBITDA of $1.1 billion, plus net debt of $2.45 billion.

IP and Ilim completed their 50-50 JV in 2007, with IP paying approximately $650 million for its stake. Ilim’s facilities include three paper mills, with combined total pulp and paper capacity of over 3.6 million tonnes. In addition, it has exclusive harvesting rights on timberland and forest areas exceeding 19.8 million acres (8 million hectares).

Staples Canada has agreed a multi-year deal with the country’s largest communications provider, Bell, hiring hundreds of employees in the process.

Starting in late spring 2023, customers can shop for Bell, Virgin Plus and Lucky Mobile products and services in Staples locations. Mobility services will be available in 300 Staples Canada stores, with Bell and Virgin Plus Internet, TV and home phone offerings offered in the majority of the reseller’s outlets within Bell’s wireline footprint.

To staff in-store kiosks, Staples has said it is now looking to fill 800 full- and part-time roles across Canada. CEO David Boone said the partnership would create “game-changing value” for consumers and businesses.

Ilim was an extremely profitable business for IP. In its 2021 annual report, IP said the JV delivered “outstanding performance”, with EBITDA of $1.1 billion and an average margin of 40%. For 2021, IP booked equity earnings of $311 million and also banked dividends of $154 million from Ilim.

In fact, in the same report, the vendor noted that, if it chose to buy its JV partner out of the agreement, the purchase price would have been in the region of $2.3 billion, excluding debt. Therefore, it looks like the US group had to cut its losses to exit Russia and that Ilim Holding got a very good deal.