KPS sold its controlling interest in Blue Heron Paper Company to an Employee Stock Ownership Plan formed by the company, creating a 100% employee-owned company in September 2006. KPS returned more than five times its invested capital in Blue Heron to its Investors in connection with the sale transaction and a prior dividend distribution. Financial terms of the transaction were not disclosed.

Headquartered in Oregon City, Oregon, Blue Heron Paper Company (“Blue Heron”) is one of North America’s leading producers of newsprint and other specialty products from a predominantly recycled fiber base, with annual revenue of $220 million and production capacity of over 360,000 tons.

KPS created Blue Heron in May 2000 to acquire the newsprint assets of the Smurfit-Stone Corporation in Oregon City, Oregon. In July 2005, Blue Heron acquired the Pomona, California assets of the former Smurfit Newsprint Corporation of California.

Very important to the success of the investment were the Association of Western Pulp and Paper Workers (AWPPW) and United Steelworkers Union.

www.blueheronpaper.com


NEWS ARTICLES:

September 14, 2006
KPS Special Situations Funds Sells Its Controlling Interest In Blue Heron Paper Company, Creates 100% Employee-Owned Company

July 12, 2005
Blue Heron Paper Company Acquires Pomona Mill

May 9, 2000
KPS and employees complete purchase of Oregon City newsprint business from Smurfit Stone Container Corp.


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