Investing - Brookfield Asset Management
Investing - Brookfield Asset Management
Investing - Brookfield Asset Management
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Case Study: Longview Fibre Paper & Packaging<br />
• Investment Type<br />
– $114 million equity investment to acquire 100% of operations<br />
• Business Overview<br />
– Washington State-based producer of Kraft paper and<br />
integrated manufacturer of corrugated containers<br />
– One million ton pulp/paper mill and seven containerboard plants<br />
– Poorly managed with low productivity<br />
• Investment Thesis<br />
– Acquisition price represented working capital value only<br />
– Reduced headcount by over 700 (30%) and focused<br />
on high margin products<br />
– Preserved a $130 million pension surplus by revising<br />
the allocation of fund assets from equities to bonds<br />
– Cash flow generation and bond offering have<br />
generated $550 million in proceeds to-date<br />
– Excellent sale candidate given recent industry consolidation<br />
Longview<br />
Value Creation Summary<br />
Operational<br />
Improvements<br />
69% 31%<br />
<strong>Asset</strong> Value<br />
Enhancements<br />
.<br />
• IRR: 57%<br />
155<br />
| <strong>Brookfield</strong> <strong>Asset</strong> <strong>Management</strong> Inc.
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