KEY POINTS:
Billionaire Graeme Hart has paid $US338 million ($NZ456m) for Blue Ridge Paper Products Inc in North Carolina, building a bigger platform in the world's $NZ121 billion drink cartons sector.
Mr Hart's investment arm Rank Group signed a merger agreement with the Canton-based Blue Ridge mills, which make paper and liquid packaging products, Blue Ridge said in a statement.
Blue Ridge's DairyPak unit make milk cartons in four US states, and also packaging for products such as seafood, juices and detergents.
Favourable trends in US dairy product consumption have boosted demand for dairy packaging, with one forecaster predicting sales to exceed $US4b in 2010.
Some commentators have speculated Blue Ridge's four DairyPak carton plants were the key attraction for Mr Hart, who already owns the beverage unit of International Paper, North America's biggest paper-maker -- bought last December for $US500m -- and also owns 98 percent of SIG Holding AG, a Swiss packaging accompany.
SIG is ranked second only to Swedish company, Tetra Laval, in the global beverage carton market.
Blue Ridge was 45 percent owned by its employees and the confirmation of the takeover was made only after a deal was cut for the unionised workers to give up their profit-sharing arrangement in return for a payrise and a $US750 bonus.
The other 55 percent stake was held by KPS Special Situations Fund LP, a private equity group based in New York -- essentially a union-linked "rescue" investor which salvaged the Blue Ridge operation from looming failure in 1999.
Hart, 52, started building his packaging empire with the purchase last year of Auckland-based forestry company Carter Holt Harvey for $NZ2.4b, giving him plants making paper cups and bags, and foldable cartons.
Blue Ridge president Rich Lozyniak said the acquisition was "a great outcome for the employees in several different senses".
Mr Lozyniak told a local paper, the Citizen-Times at Asheville, that most employees were shareholders in the company.
"In total, we should see the employees receiving between $US30 million and $US33 million in cash for their stock, so for the average employee who was here in May of 1999 through today it should be roughly in the area of $US20,000 they'll receive for their stock," Mr Lozyniak said.
"Being part of the Rank Group will make us not only a stronger company but it will improve the product offerings we have for our customers."
Blue Ridge has had only one profitable year since 1999, although its losses in 2006 were the smallest since it became an independent company.
In May of this year it reported its most profitable quarter in seven years.
- NZPA
