Subject: FW: Graeme Hart
From: "Joan Peugh" <[email-masked]>
To: "Hunter Biden" <[email-masked]>, "Eric Schwerin" <[email-masked]>
Cc: "Arlene Busch" <[email-masked]>
Date: Fri, 19 Nov 2010 16:44:56 -0500

Arlene asked that I forward you information on Graeme Hart of Rank.

*Graeme Hart*

According to the 2009 Forbes rich list, Hart is the richest person in
Australasia with a personal fortune of NZ$8.8 billion (US$6.1b), and the
110th-richest person in the world.

*Strategy: *

Much like other leveraged buyout (LBO) private equity investors, Hart
has apreference for buying under-performing and under-valued companies
with
steady cash flows which can be turned around through strong cash management,
cost-cutting and restructuring with other businesses. Since his 2006
purchase of Carter Holt Harvey he has focused his acquisitions on the paper
packaging sector. He acquired Alcoa's Packaging & Consumer group in 2008 for
US$2.7bn, later renamed Reynolds Packaging Group.. In September, the *Reynolds
Group* paid $4.4 billion for *Pactiv*, the maker of the Hefty brand trash
bags. With debt included, the acquisition is valued at about $6 billion. He
does not directly manage his businesses, and is focused mostly on the
financing related to re-capitalization of the companies

Unlike other LBO investors however, Hart is not a believer of sharing the
returns of the company, and does not allow any member of the team to get any
share in the equity of the businesses. In this manner, he ensures that the
risk and the substantial rewards of an LBO investment remain solely with
him.

*Rank Group is Graeme Hart's private investment company*. It is the 100%
owner of Burns Philp and Carter Holt Harvey. Rank had assets of
approximately NZ$3bn in cash after selling the assets of Burns Philp and
floating Goodman Fielder in 2004. Burns is a Australian and New Zealand food
manufacturing company. Carter Holt is a New Zealand timber and paper
business.

*Packaging Empire:*

Hart has built a global packaging empire with three multi-billion-dollar
acquisitions funded almost exclusively through leveraged loans and corporate
bonds.

In December 2006 he agreed to purchase International Paper's drinks
packaging business Evergreen Packaging for NZ$725 million. In May 2007 he
bought Swiss packaging company SIG for NZ$3.2bn. The SIG Division
Combibloc<http://en.wikipedia.org/w/index.php?title=Combibloc&action=edit&redlink=1>is
the second largest food and drink carton packaging company in the
world
after Swedish giant Tetra Laval. In August 2007 Hart completed his US$450M
purchase of US paper packaging company Blue Ridge Paper Products of North
Carolina which he intends to merge with Evergreen Packaging of Arkansas.
These acquisitions make Rank Group the world's second biggest player in the
paper products business.

In 2008 Hart paid US$2.7bn for Alcoa (AA) Packaging & Consumer group. He
spun off the company and renamed it Reynolds Packaging Group, which is now
headquartered in Lincolnshire, IL. While this business is within the
packaging industry, it is not paper packaging related, being mostly in the
aluminum foil and plastic closure business. Since the purchase from Alcoa,
Hart has cut more than 20% of the workforce within Reynolds, mostly through
plant shutdowns, including the flagship Reynolds Wrap Foil Plant in
Richmond, VA and restructuring efforts. This has resulted in significant
savings and profit margin jump for the company, allowing him to issue more
debt on behalf of the company in October 2009 and get high return on his
initial investment.

In November 2009 and May 2010, Hart, through additional debt financing has
combined the packaging groups he owns into Reynolds Group Holdings Limited.
RGHL is the combination of four operating segments- SIG (a beverage
packaging manufacturer headquartered in Zurich), Closures (a plastic bottle
cap manufacturer headquartered in Indianapolis), Evergreen Packaging (a
beverage packaging manufacturer headquartered in Memphis), and Reynolds
Consumer (an aluminum foil and other packaging materials manufacturer
located in Lincolnshire, IL. While the operations are spread around the
world, the RGHL corporate headquarters are located in the same office
building as Reynolds Consumer in Lincolnshire, IL.

*Personal:*

* *

Hart's successful business career has humble origins—in his younger days, he
worked as a tow-truck driver and as a panel beater after leaving school at
15. In 1987, Hart completed an MBA from the University of Otago. His
research thesis outlines the strategy for Rank, then a small hire company,
to evolve into a major corporation. This strategy relies on using the cash
flow of well-performing companies to fund debt, which as it gets paid off,
increases the equity value of the initial investors, a.k.a leveraged
buyouts.

Hart gained a big break when he purchased the Government Printing Office for
less than its capital value in 1990. The following year he bought Whitcoulls
Group which at that time included a retail chain of bookstores as well as
office and stationery concerns. He has since sold off these interests. Hart
says he lacks interest in making money for its own sake. He describes his
personal wealth—estimated at NZ$6.1bn—as a "by-product" of what he does.

While he prefers to keep a low profile in the general media he was notable
for the launch of his 58m luxury motor yacht Ulysses at Auckland's Viaduct
Harbour in January 2006. The yacht is valued at nearly $100M and took five
years to complete due to being gutted by a fire during refit by a New
Orleans shipyard.

No fight is too small for Hart who is known to spend his time and prowess
often fighting small disputes. In March 2008, an area of 1000 square meters
which included protected native trees was cleared on Hart's Waiheke Island
estate. Following a complaint, authorities investigated and a fine of NZ$300
was imposed, which Hart is disputing and has not paid