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Our View: Mill buyer offers hope for workers

5:39 PM, Mar. 22, 2013  |  Comments
Wausau Paper has found a buyer for its mill in Mosinee, pictured here in February 2012, as well as in Rhinelander.
Wausau Paper has found a buyer for its mill in Mosinee, pictured here in February 2012, as well as in Rhinelander.
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The paper industry continues through a time of huge and sometimes wrenching transition, so any new development pertaining to Wausau Paper's mills in Mosinee and Rhinelander comes with many caveats. Not only are there still unanswered questions around what happens to the mills, but also it's difficult or impossible to predict the path the industry will take in the future.

Even knowing all this, it was hard not to breathe a sigh of relief Thursday when Wausau Paper announced that it had found a buyer for the two mills, which it put up for sale in January. KPS Capital Partners LP, a New York-based private equity firm with the mission of "catalyz(ing) the turnaround of underperforming or distressed businesses," according to its website, signed a letter of intent to purchase the mill.

The deal is not done. And we don't know what that turnaround will entail. But this feels like a major improvement on the alternative, which we saw play out in Brokaw: a permanently closed mill.

Wausau Paper is a publicly traded company, and for about the last year and a half its board had tried to fend off advances from a Manhattan hedge fund that became a major investor. That hedge fund, Starboard Value LLC, has a reputation as a ruthless operator that takes over underperforming companies and dismantles them - or in some cases, turns them around.

It was after intense pressure from Starboard that Wausau Paper put the local mills up for sale, with an intention on focusing on tissue and paper towel manufacturing at mills in Kentucky and Ohio.

And that could have been the end of the story. Without a buyer, the mills would have closed. (A mill in Brainerd, Minn., will close, the company announced last month.)

It's hard not to be struck, here in north central Wisconsin, by the way these battles feel like they're playing out hundreds of miles away at a level of synthetic high finance that seems disconnected from the lives of any local worker. If the deal goes through, it will transfer effective ownership from a cutthroat Manhattan hedge fund to a Manhattan-based private equity firm with a reputation as a turnaround artist - from one Wall Street titan to another. But for the lives of workers here, the difference in outlook is stark.

Let's hope KPS Capital Partners succeeds in making these plants sustainable for the long term in our communities.

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