As expected, Verso is consolidating locations and moving its headquarters from Tennessee to Ohio. Verso purchased NewPage Holdings for $1.4 billion in January 2014, but later filed for Chapter 11 bankruptcy. While Verso has emerged from bankruptcy, the company is not out of the woods yet.

“You’ve got a wounded company cutting staff, and that hurts morale,” says Capstone CEO David Braun in The Memphis Business Journal. David says Verso will have to do more than simply cut costs in order to be successful in the long-run. Read the full article here: Even after move, Verso will have more cuts to make

 

Capstone CEO David Braun’s Analysis in the Memphis Business Journal

Verso Paper, after acquiring NewPage Holdings for $1.4 billion in January 2014, has filed for Chapter 11 bankruptcy. Verso, which manufactures coated paper used in products like magazines, is struggling in a declining market. With its new acquisition, the company failed to realize desired economies of scale needed to compete in a world of rising digital media.

What happened? David Braun analyzes what went wrong and what Verso might do to survive in his interview in the Memphis Business Journal. Read the full article here: “Analysis: What might Verso look like after Chapter 11?

Just 22 days after announcing its plans to acquire NewsPage Holdings, Verso Paper is facing some trouble pulling together the financing for the deal. What does Verso’s latest announcement mean? Will the deal still move forward?

Capstone CEO David Braun and Managing Director John Dearing analyze the latest developments in the Memphis Business Journal. Read the full article here: “Verso acquisition gets more complicated.

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Verso Paper announced that it would acquire NewPage Holdings in a deal worth $1.4 billion. NewPage rejected a similar offer from Verso in 2012, also valued at $1.4 billion. So what changed this time around? Quite simply, it’s the environment: Both paper companies realize the paper market is shrinking and that’s not about to change any time soon.

One of the top reasons for acquisition is to expand in a declining market. Acquiring a bigger portion of a waning market allows a company to maintain or even increase revenues while waiting for the market to rebound. The Verso Paper-NewPage acquisition fits into this category.

The paper industry is facing stiff competition from online and digital media and is under pressure from environmental issues. According to the Manufacturers Alliance for Productivity and Innovation (MAPI), production in 2013 was flat compared to 2012 and the market is expected to grow just 1% in 2014. Compared quarter-by-quarter, paper production momentum declined by 6%. To survive, the two paper companies need each other. By combining they can own a larger slice of a smaller market and leverage cost synergies from economies of scale.

If you’re in a static or declining market, don’t despair! There are plenty of creative solutions to ensure your company grows despite what’s happening in the market. Analyze your current position, think about your growth options and develop your strategic plan.

If you have any questions, feel free to reach out using the comment box below.

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Verso Paper Corp announced it will acquire NewPage Holdings, Inc. in a deal valued at $1.4 billion. While the coated paper industry is in decline due to the rise of digital media, this acquisition could make Verso Paper and NewPage stronger, according to CEO David Braun. Read his entire analysis in the Memphis Business Journal.

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