Many Mills now acquired by Private Investors

Most paper manufactures have not even earned its cost of capital and have been out of favor with 'Wall Street' for many years. In recent years, the industry has witnessed consolidation, globalization, mergers, restructuring, reduced capital spending, and curtailment of production. New buyers are surprisingly private investors. Why we ask at Paper.com ????? RISI, an independent consultant, summarized a rationale as
-These buyers have negotiated discounted purchase prices for the assets
-Cheaper, more creative, financing and private investors can carry more debt than public companies - debt is less expensive than equity.
-Fewer short term pressures vs. public companies - they can be more flexible than meeting short term expectations
-No formal costly outside auditing - No expensive requirement of reporting to the public - this eliminates expensive shareholder reports and board expenses.
-Better operators - Private investors tend to be very good, focused operators.
-Many of these new operators believe they can improve operations and market the mill at a later date for a multiple of purchase price.

We at, Paper.com, prefer to sit on the side lines and distribute paper versus produce the product.

Recent examples of New Owners include-
-Madison Dearborn -- Packaging Corp of America; Boise Cascade
-CMP Holding -- International Paper Coated Division
-Cerberus -- MeadWestvaco coated Div.
-Kohlberg -- International Paper Specialty Div
-Koch -- Georgia-Pacific
-Texas Pacific -- Smurfit-Stone