KEY POINTS:
His $3.3 billion ($4.6 billion) takeover of Swiss packaging company SIG is not yet complete but Graeme Hart is already sizing up the next acquisition for his empire - in the mountains of North Carolina, United States.
Blue Ridge Paper, based in Canton, said yesterday it had "signed
a non-binding letter of agreement" with Hart's Rank Group to negotiate the sale of the company.
The privately owned paper and packaging company has sales of US$570 million, assets of more than US$300 million and a strong US market position in the paper packaging sector - specialising in milk and juice cartons, and envelope and printing paper.
But it has also been unprofitable for several years, is carrying debt of more than $200 million, and has an ebitda of about US$35 million.
It is likely to come with a price tag well south of $1 billion.
Hart has a preference for buying non-performing companies which can be turned around through strong management, cost-cutting and integration with other businesses.
This year Hart purchased an Iowa based paper and packaging company Evergreen from US company International Paper $725 million.
Last year he paid $3.3 billion for Carter Holt Harvey (which had been majority owned by International Paper).
All three companies produce the same kind of "gable top" liquid beverage packaging.
Blue Ridge Paper was among the potential buyers that looked at International Paper's Evergreen business, North Carolina newspaper The Asheville Citizen-Times reported.
Since Evergreen and Blue Ridge are two of the biggest producers of gable top packaging in the US, any deal could attract the scrutiny of US competition regulators, the paper said.
Blue Ridge has six production facilities - a mill, an extrusion plant and four Dairypak packaging plants.
It is majority owned by KPS Special Situations Fund, a New York-based investment group and 45 per cent owned by employees.
Blue Ridge employs 2000 people and has a highly unionised work force.
But in a rare twist Hart appears to have union support for the deal.
Yesterday the paper reported that union members were supporting the buyout because it meant more capital.
The paper quotes Smokey Mountain Union president Howard Taylor:
"I think it will be good because the guy's got a lot of money," Taylor said. "Now, if we need a new piece of equipment or if we have some kind of catastrophe like another flood basically, we'd be sunk. But this guy's got deep pockets."
Paper chase
* Graeme Hart's latest target is North Carolina-based Blue Ridge Paper Products.
* The company has sales of US$570 million but has not made a profit since 2000.
* It specialises in the same kind of "gable top" beverage cartons produced by Carter Holt Harvey and Hart's other US packaging business.
