BUCKSPORT – International Paper Co. has agreed to sell its coated paper division, including its mills in Bucksport and Jay, to a New York investment company.

CMP Holdings LLC, an affiliate of the private investment firm Apollo Management, will purchase the coated paper mills for $1.4 billion, the companies announced Monday. The sale involves the two Maine mills as well as mills in Quinnesec, Mich., and Sartell, Minn.

An Apollo executive said the purchase was an excellent business opportunity with growth potential.

In 2005, the four mills produced approximately 2 million tons of coated papers for the magazine, catalog and retail insert markets and generated $1.6 billion in sales, according to information provided by IP. In Maine, the Jay mill employs about 1,000 people and the Bucksport mill, 800.

IP will receive about $1.37 billion in cash plus about $30 million in the form of a 10 percent limited partnership interest in CMP Investment LP, the parent company of CMP Holdings. CMP has no relationship to Central Maine Power, the state’s largest electricity distributor.

The announcement of the sale ended months of speculation about the fate of the Maine mills after IP’s decision last fall to sell the coated paper division as part of a wider restructuring strategy. Expected proceeds from divestitures announced to date, including the coated paper sale to CMP Holdings, total approximately $9.1 billion, according to the IP announcement.

“The coated paper sale agreement is another important step in transforming International Paper to narrow our focus, strengthen our returns and improve value for our share owners,” said John Faraci, IP chairman and chief executive. “Our coated papers unit is a good business, with talented leadership, excellent employees, quality bands and an outstanding customer base. This business has been an important contributor to International Paper, and we expect it will continue to thrive under new ownership.”

Scott Kleinman, a partner at Apollo Management, called its new acquisition an asset with a leadership position in the North American coated paper markets.

“We view the company as an excellent business and look forward to the opportunity to invest alongside a strong management team with whom we will work to grow the business and realize the full potential of the company’s leading market position,” Kleinman said.

Local mill officials in Bucksport did not comment on the pending sale, but reaction from employees, who were briefed about the transaction at meetings during the day, was mixed. Although many were relieved that the waiting is over, some were concerned about what the future holds.

“This is a good step,” said employee Linda Fairbrother of Bucksport. “We know something now. We don’t have to wonder if we’re going to be spun off. Now we’re waiting for the rest of the answers.”

John Sweeney of Bucksport, who came to the Bucksport mill two years ago from Millinocket, said he was “pretty happy” about the news, but added that he knows that layoffs generally affect the newest employees first.

“I hope it keeps the operation the way it is, and it sounds like they’re going to,” he said. “The mill’s been profitable so far; if we can continue to produce product, I guess we’ll keep going.”

Early indications are that there will be a “transparent period” when Apollo takes over, said Lance Raymond of Prospect, president of the IBEW local at the mill. That means any immediate changes in the operations at the mill are unlikely. “There’s no talk of them taking any product out of the mill’s production,” Raymond said. “You’ve got to look on the positive side there.”

But others worry that changes will come when existing union contracts expire, or that the new owners will want to renegotiate contracts with the unions at the mill. Some wonder what impact that will have on long-term benefits.

Kenneth Allen of Bucksport has worked for the mill for 33 years. He’s cautiously optimistic about the future.

“They’re an investment company and they want to make money; that’s what they do,” Allen said. “We have been making money here, and I expect that will go on. I’d like to retire here in 10 years, and I wonder about the retirement and what the benefits are going to be.”

Town officials also are taking a wait-and-see approach to the sale, which, according to Town Manager Roger Raymond, comes as no surprise. Apollo is one of the potential buyers that had been rumored to be interested in the mill, which is the town’s largest taxpayer, contributing about half of the town’s property tax revenue.

Although he said the town would have to wait to see what the company plans for the Bucksport facility, Raymond said he is optimistic about the mill’s future given the large investment Apollo is making.

“They’re certainly putting in a large amount of money to buy these assets,” the town manager said. “When you look at it, this mill will be competing for capital against just four mills now, not 20.”

While there was some “comfort” in having the mill owned by the world’s largest paper company, Bucksport Economic Development Director David Milan noted that Apollo has been around since 1990, has $13 billion in assets and has done its homework.

“We’ll sit down with them and see what their plans are for Bucksport and offer any assistance we can to make it a successful mill,” Milan said.

Because IP is a publicly traded company, the sale requires regulatory approval and other closing conditions. Officials expect the sale to be completed by midsummer.

The Associated Press contributed to this report.