Posted Wednesday, May 16, 2012 --- 11:03 a.m.

APPLETON, Wis. (AP) -- Appleton Papers executives say a merger with a Texas acquisition firm will strengthen the Wisconsin company's balance sheet and provide capital for growth.

Hicks Acquisitions II, of Dallas, and Appleton Papers will combine in a $675 million deal to create Appvion. The new name combines the words "applied" and "innovation."

The employee-owned Appleton Papers employs about 1,800 people. Appleton's president, Mark Richards, says the transaction is a milestone in the company's transformation from a paper producer to one focused on paper coating applications and specialty chemicals.

Members of Appleton Papers' management team will continue in their current positions under the new ownership structure. The deal is expected to close by July.

Copyright 2012. The Associated Press.