Fortress Global Enterprises Inc - Class A FTPLF

Good News and Bad News

[OptsyEagle]

The Prince Albert, Sk. mill went to Paper Excellence and not Fortress Paper.  There was a rumour that Fortress might buy this mill.  The good news is that our CEO did not get drawn into overpaying for this mill and that is probably the most important tidbit of this news.  Right now the dynamics of Fortress's business could not be better and I am glad that he did not get enticed into adding risk to the equation by overpaying for a mill.

With this in mind, I think it will be difficult in today's environment to acquire another mill like the Thurso mill on terms that are tranformational like this mill was.  With that in mind, I suspect he may be spending as much time these days looking at other non-pulp opportunities as he does looking for ones in this industry.  The pulp business has changed a lot in just a year and the ability to buy $850 million of equipment for $1.2 million have long been gone.  Since other companies are more likely, willing to risk other people's money over-bidding for these mills, then our CEO who has his own wealth invested in Fortress, I doubt we will see another acquisition in the pulp business.  That is just my opinion.

That being said, Fortress Paper will begin to spin off a tremendous amount of free cash flow, starting in the 3rd quarter of 2011 (that quarter starts in June if you can believe it) which will make today's share price look like a steel by the time this year comes to an end.