Private equity firm HIG Capital has completed the acquisition of Caraustar Industries, a provider of recycled paperboard and related products. Caraustar was majority owned by private investment funds managed by Wayzata Investment Partners.
Headquartered in Austell, Georgia, Caraustar is one of North America’s largest integrated manufacturers and converters of 100 per cent recycled paperboard and converted paperboard products. Caraustar serves end-use markets in tube and core, folding carton, gypsum facing paper and specialty paperboard products. Caraustar is also one of the largest collectors and processors of recovered fibre in the US. The company services its diversified customer base through a large network of facilities across North America.
In 2009, Wayzata led a group of bondholders in a pre-packaged chapter 11 process in which Wayzata-managed funds acquired a majority ownership stake in Caraustar. The Wayzata led restructuring significantly reduced Caraustar’s debt burden and dramatically improved Caraustar’s balance sheet. Since exiting bankruptcy, Caraustar has used its stronger balance sheet to drive operational improvement and to increase profitability.
Mike Patton, chief executive of Caraustar, says: "We believe this is an exciting time in our industry, and I am pleased to have HIG’s support to help us achieve our growth plan. We look forward to working with HIG to build upon our reputation as a customer-oriented market leader."
"We are very excited about the Caraustar opportunity," says Tenno Tsai, a principal of HIG "Caraustar is a market leader with a blue chip customer base, broad geographic footprint and an efficient, high quality manufacturing base. We believe there are numerous market opportunities going forward and we look forward to supporting Mike and his team in achieving continued growth," he commented further.
Financing for the transaction was provided by Credit Suisse Securities (USA), Goldman Sachs Bank USA, Jefferies and Wells Fargo Capital Finance. Jefferies was financial advisor to Caraustar. Credit Suisse Securities (USA) was financial advisor to HIG Capital.
