Strategic & Financial Arguments(TM)

for the pulp and paper industry worldwide

August 2016

Participating as industry experts in pulp and paper financing and M & A deals around the world for over two decades, we continue to see the same mistakes made over and over. This newsletter is designed to help you avoid costly mistakes we have seen others make. We will be giving you one or two points each month to help improve your performance.

Somebody loves the pulp & paper industry...

With news breaking last week that Koch Industries may be interested in acquiring International Paper, we can confidently write the above headline.

Koch has learned how to manage pulp and paper industry assets successfully--for over a decade. On December 23, 2005, Koch Industries completed the purchase of the formerly publicly traded Georgia-Pacific Corporation. However, prior to that, Koch had already acquired some pulping assets from G-P, which they branded Koch Cellulose.

Someone else who loves the industry is Australian Anthony Pratt. His privately held Pratt Industries in North America has reached position number 181 on Forbes' list of largest private companies in the United States. It is the 5th largest corrugated packaging company in the country, up from 45th circa 1985.

The keys to both Koch Industries and Pratt Industries are that they are privately held companies. That does not make much business sense for the readers of this newsletter, but it may be instructive in the ways we value companies.

Both Pratt and the Koch brothers say they will never go public. This may lead one to wonder about the inefficiencies of being a publicly traded company. Obviously, these owners think the effort of a public listing is not worth the costs.

If you have a casual question or a major deal, call me on my personal cell phone - 404-822-3412 or email me at jthompson@taii.com. We are here to help.

Sincerely,

Jim Thompson, CEO
Talo Analytic International, Inc.

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