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Appleton Papers, Hicks Acquisition Agree to $675 Million Business Combination

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Appleton Papers Inc., Appleton, Wis., USA, and Hicks Acquisition Co. II, Dallas, Texas, today announced that they have agreed to a business combination valued at $675 million. The combined company will be listed on the Nasdaq exchange, and according to Appleton, will position the company for long-term growth and profitability with an improved balance sheet and greater access to capital.

Appleton is a producer of specialty coated paper products and a provider of encapsulation applications. Hicks Acquisition is a special purpose acquisition company founded and headed by Thomas O. Hicks, with approximately $149.3 million of cash in trust.

When the transaction closes, Appleton will change its corporate name to Appvion. The new name combines the words "applied" and "innovation," reflecting the company's transformation from a paper company to a business focused on coating formulations and applications, and specialty chemicals.

With 2011 sales of nearly $860 million, Appleton operates in three business segments: direct thermal, in which it holds the leading position in North America and is considered to be the market leader in innovation; carbonless/security, in which, under its NCR PAPER and Appleton brands, the company holds the number one position worldwide; and Encapsys®, a rapidly growing specialty chemical operation that is a leader in microencapsulation for use in branded consumer products. The company employs approximately 1,800 people and has been 100% employee-owned since Nov. 9, 2001.

Members of the Appleton management team will continue in their current positions under the new ownership structure.

"This transaction will be the latest milestone in Appleton's transformation from a paper producer to a company focused on coating formulations and applications, and specialty chemicals," said Mark Richards, Appleton's chairman, president, and CEO. "The combination with Hicks Acquisition provides the company with capital to further strengthen our balance sheet, support our businesses, and pursue attractive growth opportunities in our markets."

Completion of the transaction, which is expected during July, is subject to expiration or early termination of any applicable Hart-Scott-Rodino waiting period, approval of the transaction by Hicks Acquisition's stockholders, approval by State Street Bank and Trust Co., the trustee representing participants in the Appleton ESOP, and certain other closing conditions.


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