According to the Milwaukee Journal Sentinel, Wausau Paper Corp said today it will sell its specialty paper business, which includes the Rhinelander and Mosinee mills, to a new company formed by KPS Capital Partners of New York.

Terms of the sale require that the United Steelworkers ratify new collective bargaining agreements with the new company, and the Wausau will retain legacy pension and post-retirement liabilities related to the businesses.

Wausau Paper President and chief executive Hank Newell indicated the announcement will be an important step to strategically reposition the company and create additional value for shareholders. Wausau Paper said it would have the option to own up to 25% of the new company.

KPS has reported signed a letter of intent to purchase another company that will be combined with the specialty paper business. The sale is expected to be completed in the second quarter, subject to conditions being met.