New York, NY (July 31, 2007) -- KPS Capital Partners, LP (“KPS”) announced today that it has sold its portfolio company, Blue Ridge Holding Corp., the parent of Blue Ridge Paper Products Inc. (“Blue Ridge” or the “Company”), to Packaging Holdings, Inc. (an entity wholly owned by Rank Group Limited) for $338 million, subject to certain adjustments. Rank Group Limited, headquartered in New Zealand, is the owner of the Carter Holt Harvey Ltd. group of companies, Evergreen Packaging Inc. (formerly the Beverage Packaging Division of International Paper), and SIG Holding AG (Switzerland).
The transaction represents the seventh sale of a portfolio company by KPS over the past 14 months, and one of many complex, cross-border sale transactions that KPS has completed involving strategic buyers in Europe, Japan and Greater Asia.
David Shapiro, a Managing Partner of KPS, stated, “We take immense pride in what Blue Ridge has accomplished. KPS and our employee-owner partners created a new company to acquire a set of assets that required significant modernization, and had no senior management team, new product pipeline or customers under contract. But we saw an opportunity to create something special, and under our ownership these assets were transformed into Blue Ridge, a thriving independent enterprise. During our ownership, Blue Ridge grew market share across its core packaging product categories, achieved dominant positions with the most important industry customers, introduced industry-leading barrier structure technology, created joint ventures in Latin America and Europe, and modernized its key manufacturing assets. The success of Blue Ridge is another validation of our investment strategy.
“We congratulate Rich Lozyniak, Blue Ridge’s Chief Executive Officer, the Company’s management team and our employee-owners on their considerable shared achievement. We thank General Electric Capital Corporation for its equity co-investment and strong support of the Company over the years. We also thank the United Steelworkers for bringing us this investment opportunity and for playing a very critical role in making the Company a success.”
Mr. Lozyniak added, “On behalf of the 2,000 employee-owners of Blue Ridge, we thank KPS for seeing value where no one else could, and for providing the leadership and resources that allowed Blue Ridge to become an industry leading company. We look forward to continuing our commitment to customer service and manufacturing excellence, developed in partnership with KPS, under the Rank Group’s ownership.”
Leo Gerard, International President of the United Steelworkers, said, “As a result of the acquisition of Blue Ridge Paper by Packaging Holdings Incorporated the USW employee-owners, our Union and KPS Capital was a driving force in creating a new and successful company out of assets many industry experts said should close. I congratulate all of those involved on their accomplishment. Through our members’ sacrifices, investment in their futures, hard work, dedication and focus, we have again proven the experts were wrong. The Company’s employee-owners and our USW members are receiving nearly $30 million of cash in their Employee Stock Ownership Plan (ESOP) accounts, a new and improved collective bargaining agreement, and a bright future with Packaging Holdings Incorporated. This is another example of the successful collaboration between Steelworkers and KPS over the past two decades.”
KPS legal advisor with respect to this transaction was Paul, Weiss, Rifkind, Wharton & Garrison LLP, and Houlihan Lokey Howard & Zukin provided a fairness opinion to Blue Ridge Holding Corp.
About Blue Ridge Paper Products Inc.
Headquartered in Canton, North Carolina, Blue Ridge Paper Products Inc. (www.blueridgepaper.com) is a leading integrated manufacturer of liquid packaging, envelope paper and coated bleachboard used in food service packaging. The Company also produces specialty uncoated and extrusion coated papers. The Company conducts operations in six manufacturing facilities located in five states, and employs over 2,000.
About KPS Capital Partners
KPS, through its affiliated management entities, is the manager of the KPS Special Situations Funds, a family of investment funds with approximately $21.4 billion of assets under management (as of December 31, 2023). For over three decades, the Partners of KPS have worked exclusively to realize significant capital appreciation by making controlling equity investments in manufacturing and industrial companies across a diverse array of industries, including basic materials, branded consumer, healthcare and luxury products, automotive parts, capital equipment and general manufacturing. KPS creates value for its investors by working constructively with talented management teams to make businesses better, and generates investment returns by structurally improving the strategic position, competitiveness and profitability of its portfolio companies, rather than primarily relying on financial leverage. The KPS Funds’ portfolio companies generate aggregate annual revenues of approximately $20.3 billion, operate 222 manufacturing facilities in 26 countries, and have approximately 48,000 employees, directly and through joint ventures worldwide (as of December 31, 2023). The KPS investment strategy and portfolio companies are described in detail at www.kpsfund.com.
