KPS Capital Partners Sells Portfolio Company Blue Ridge Holding Corp. To Packaging Holdings, Inc.

NEW YORK, July 31 /PRNewswire/ -- KPS Capital Partners, LP ("KPS")announced today that it has sold its portfolio company, Blue Ridge HoldingCorp., the parent of Blue Ridge Paper Products Inc. ("Blue Ridge" or the"Company"), to Packaging Holdings, Inc. (an entity wholly owned by RankGroup Limited) for $338 million, subject to certain adjustments. Rank GroupLimited, headquartered in New Zealand, is the owner of the Carter HoltHarvey Ltd. group of companies, Evergreen Packaging Inc. (formerly theBeverage Packaging Division of International Paper), and SIG Holding AG(Switzerland). The transaction represents the seventh sale of a portfolio company byKPS over the past 14 months, and one of many complex, cross-border saletransactions that KPS has completed involving strategic buyers in Europe,Japan and Greater Asia. David Shapiro, a Managing Partner of KPS, stated, "We take immensepride in what Blue Ridge has accomplished. KPS and our employee-ownerpartners created a new company to acquire a set of assets that requiredsignificant modernization, and had no senior management team, new productpipeline or customers under contract. But we saw an opportunity to createsomething special, and under our ownership these assets were transformedinto 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 jointventures in Latin America and Europe, and modernized its key manufacturingassets. The success of Blue Ridge is another validation of our investmentstrategy. "We congratulate Rich Lozyniak, Blue Ridge's Chief Executive Officer,the Company's management team and our employee-owners on their considerableshared achievement. We thank General Electric Capital Corporation for itsequity co- investment and strong support of the Company over the years. Wealso thank the United Steelworkers for bringing us this investmentopportunity and for playing a very critical role in making the Company asuccess." Mr. Lozyniak added, "On behalf of the 2,000 employee-owners of BlueRidge, we thank KPS for seeing value where no one else could, and forproviding the leadership and resources that allowed Blue Ridge to become anindustry leading company. We look forward to continuing our commitment tocustomer service and manufacturing excellence, developed in partnershipwith 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 HoldingsIncorporated the USW employee-owners, our Union and KPS Capital was adriving force in creating a new and successful company out of assets manyindustry experts said should close. I congratulate all of those involved ontheir accomplishment. Through our members' sacrifices, investment in theirfutures, hard work, dedication and focus, we have again proven the expertswere wrong. The Company's employee-owners and our USW members are receivingnearly $30 million of cash in their Employee Stock Ownership Plan (ESOP)accounts, a new and improved collective bargaining agreement, and a brightfuture with Packaging Holdings Incorporated. This is another example of thesuccessful collaboration between Steelworkers and KPS over the past twodecades." KPS legal advisor with respect to this transaction was Paul, Weiss,Rifkind, Wharton & Garrison LLP, and Houlihan Lokey Howard & Zukin provideda fairness opinion to Blue Ridge Holding Corp. About Blue Ridge Paper Products Inc. Headquartered in Canton, North Carolina, Blue Ridge Paper Products Inc.(http://www.blueridgepaper.com) is a leading integrated manufacturer of liquidpackaging, envelope paper and coated bleachboard used in food servicepackaging. The Company also produces specialty uncoated and extrusioncoated papers. The Company conducts operations in six manufacturingfacilities located in five states, and employs over 2,000. About KPS Capital Partners, LP KPS Capital Partners, LP is the manager of the KPS Special SituationsFunds, a family of private equity funds with over $1.8 billion of committedcapital focused on constructive investing in restructurings, turnaroundsand other special situations. KPS has created new companies to purchaseoperating assets out of bankruptcy; established stand-alone entities tooperate divested assets; and recapitalized highly leveraged public andprivate companies. The KPS investment strategy targets companies withstrong franchises that are experiencing operating and financial problems.KPS invests its capital concurrently with a turnaround plan predicated oncost reduction, capital investment and capital availability. Typically, theKPS turnaround plan is accompanied by a financial restructuring of thecompany's liabilities. The KPS investment strategy and portfolio companiesare described in detail at the firm's website: http://www.kpsfund.com.