PaperlinX Completes Strategic Review

PaperlinX Ltd., Victoria, Australia, this week announced a range of initiatives marking the conclusion of its "strategic review." Key aspects of the announcement are:

Spicers Paper, Santa Fe Springs, Calif., is a paper distributor with 12 warehouse locations in the U.S. West and Midwest. Kelly Paper, City of Industry, Calif., operates a chain of paper stores with 48 locations across four western U.S. states. Combined sales for both companies were approximately $500 million in the company's most recent fiscal year. The closing is expected to take place on June 30. "Spicers and Kelly are well-managed and respected businesses, and we are thrilled to have the opportunity to acquire them," said Ken Wallach, chairman and CEO of Central National-Gottesman. "The existing management and staff of Spicers and Kelly have done an outstanding job. These are excellent businesses and we intend to operate both of them as they are, and under their existing brands. The Spicers and Kelly locations are a perfect compliment to our 22 Lindenmeyr Munroe paper distribution facilities and stores, located on the East Coast and in the Midwest, and will provide enhanced coverage to our customers and suppliers."

PaperlinX's Chairman Harry Boon said that "the Strategic Review Process focused on reducing costs, strengthening the group's financial position, and creating a sustainably profitable business. Critical to this was the need to raise funds from the disposition of assets. The initiatives announced today, in conjunction with the restructuring plan, are expected to provide a significantly lower operating cost base, substantially improve operating liquidity, and provide a platform for a return to operating profitability after the restructure is completed. As a consequence of today's announcements, PaperlinX is no longer in discussions with any third parties in relation to a whole of company proposal."

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