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The Watermill Group Acquires Manistique Paper

Lexington, Massachusetts, USA, 17 April 2012 -- (BUSINESS WIRE) -- The Watermill Group, a strategy-driven private investment firm, received court approval today to acquire Manistique Papers, the only company in North America producing high-value uncoated printing and writing paper exclusively from 100% recycled fiber. The purchase agreement was finalized following an auction and confidential bidding process.

Manistique Papers enhances The Watermill Group's investment portfolio of environmental paper manufacturers, which also includes FutureMark Paper Company, the leading recycled coated paper producer in North America. With today's acquisition, The Watermill Group brings together leaders in 100% recycled paper in the coated and uncoated markets and creates the most comprehensive line of recycled printing paper products in North America, representing nearly 300,000 tons of recycled paper per year.

Today's acquisition significantly expands The Watermill Group's footprint in sustainable paper manufacturing and positions the firm to deepen the value it delivers to Manistique's and FutureMark's customers, employees, and investors.

"Over the past 3-5 years, sustainability has moved from a corporate nice-to-have to a corporate must-have, especially among Fortune 500s," said Steven Karol, founder and managing partner at The Watermill Group. "This development is reflected in the success of our FutureMark investment, which has leveraged its unrivaled environmental position to significantly outperform competitors in a declining sector. We'll use the strategies proven at FutureMark to revitalize and grow Manistique, building a stronger employer for the local community, driving new investor value by leading the high-value market for sustainable paper, and creating a wider assortment of environmental paper products for our Fortune 500 customers."

Manistique Papers has a 72-acre manufacturing site in Manistique, Michigan, that can produce up to 500 tons of recycled pulp per day and approximately 130,000 tons per year of uncoated, 100% recycled paper.

"Manistique Papers will benefit greatly from The Watermill Group's financial stability, operational expertise, and experience in environmental paper," said Kelly George, president and CEO at mBank, the lead lender and facilitator in the sale of Manistique Papers. "We appreciate the Watermill team's creative strategies for revitalizing Manistique and the commitment they've shown to the company, which is an important employer in our community."

To maximize synergies between Manistique Papers and FutureMark Paper, The Watermill Group will run both organizations as sister companies under a unified management structure led by current FutureMark president and CEO Steve Silver. While unified management will ensure strategic alignment and close cooperation between Manistique and FutureMark in the marketplace, each company will be separately owned and operated.

"We believe we can help bring new value and opportunity to Manistique's operation while expanding FutureMark's leadership in environmental paper," Silver said. "As reflected by our success with FutureMark, which saw revenues climb 15% in a declining market last year, we've found a business model for the paper industry that works, and we're eager to apply this strategy to Manistique while allowing both organizations to flourish as separate, focused operations. The customers of each operation will now have a much wider array of environmental papers to choose from."

Each company holds a unique position in the paper industry: Manistique Papers is the only North American company making high-value uncoated printing and writing paper exclusively from 100% recycled fiber; FutureMark Paper is the only North American company making 100% recycled coated publication paper. Together, Manistique and FutureMark will collaborate to grow the market for recycled paper, share best practices, achieve operational efficiencies, and further reduce the environmental impact of their production processes. Both organizations are expected to realize economies of scale by combining raw materials sourcing, deinking technology, freight, and logistics. Customers of Manistique and FutureMark will gain convenient access to a much broader range of recycled paper products.

The Watermill Group (www.watermill.com) is a strategy-driven private investment firm that revitalizes companies to drive superior returns. For more than three decades, Watermill has been acquiring, operating, and improving companies. Watermill looks for businesses at a crossroads and applies a unique combination of strategic insight and management expertise to drive growth. The Watermill Group's other current portfolio companies include C&M Corporation and MultiLayer Coating Technologies, LLC.


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