STAMFORD, Conn., June 26 -- International Paper has signed a definitive agreement to sell its kraft papers business to Stone Arcade Acquisition Corp. for approximately $155 million in cash, subject to certain closing and post-closing adjustments, and two payments totaling up to $60 million, payable five years from the close of the transaction, contingent upon business performance. The kraft papers business generated approximately $220 million in sales in 2005 and includes the Roanoke Rapids, N.C., paper mill and the Ride Rite dunnage bag plant in Fordyce, Ark. The agreement is part of IP's previously announced transformation plan to focus on uncoated papers and packaging. Proceeds from divestitures announced to date, including kraft papers, total approximately $9.3 billion. The sale is expected to close in the third quarter, subject to satisfaction of various closing conditions, including regulatory approval and approval by Stone Arcade shareholders. After closing, the company will be called KapStone Kraft Paper Corporation -- a division of KapStone Paper and Packaging Corporation. Tim Keneally, currently vice president of IP's kraft papers business, will lead the KapStone Kraft Paper business. "Kraft Papers has been a solid niche business for International Paper and we're pleased to see that a number of interested parties, including Stone Arcade, agree with us," said Carol Roberts, senior vice president of IP Packaging Solutions. "This agreement speaks to the quality of the people and the assets of this business." "The acquisition of IP's kraft papers business is an important first step for our company, Stone Arcade," said Roger Stone, chairman and CEO of Stone Arcade. "It provides us with a very solid platform from which we hope to expand. We look forward to working with the current management group to develop internal growth opportunities while we simultaneously explore strategic acquisitions." Matt Kaplan, Stone Arcade president and chief operating officer, added, "We are very excited regarding the acquisition of IP's kraft paper business. Over the past several weeks, we have had the opportunity to visit the operations and meet many of its employees. Needless to say, we have been very impressed." International Paper's kraft papers business produces approximately 400,000 tons of kraft papers, used in a variety of end-use products including approximately 9 million Ride Rite dunnage bags. The business employs approximately 700 people. International Paper accounted for the results of its kraft papers business as a discontinued operation and wrote down the business' assets in the first quarter of 2006.