::The Center for Paper Business and Industry Studies::

080215 Deutsche Bank Report - Dr. Paper's Weekly Wrap Up (2/15/08)

Deutsche Bank - Equity Research

* AbitibiBowater announced the sale of the Snowflake mill to Catalyst. We find the $161MM price disappointingly low. Despite its low cost structure, the price values the mill at just 5.4x LTM (trough?) EBITDA & 2.8x 2006(normalized?) EBITDA.

* Domtar reported a disappointing 4Q, and we trimmed estimates slightly. However, the 7.5% sell-off looks overdone to us. Even on our reduced '08 estimate, free cash flow is 15% of market cap.

* Two more containerboard producers announced $50/ton price increases for March. All 7 of the largest NA producers are now behind the price hike initiative.