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HIG Capital completes sale of Caraustar Industries for USD1.8bn

HIG Capital (HIG) has completed the sale of its portfolio company Caraustar Industries (Caraustar) to Greif, Inc for USD1.8 billion.

Headquartered in Austell, GA, Caraustar is a specialist in the production of uncoated recycled paperboard (URB) and coated recycled paperboard (CRB), with a variety of applications that include tubes and cores and a diverse mix of specialty products. Additionally, Caraustar is also one of the largest collectors and processors of recovered fibre in the United States. The Company services its diversified customer base through a large network of facilities across North America.
HIG acquired Caraustar in May 2013 in partnership with Caraustar management, and has since more than doubled revenue and profitability through organic investment and both transformative and tuck-in acquisitions.
Tenno Tsai, Managing Director of HIG, says: “As a leader in the recycled paperboard and packaging solutions market, Caraustar’s ability to deliver a broad product portfolio to a national customer base via a low cost, vertically integrated manufacturing network provides a value proposition unmatched in the industry. Caraustar is a terrific organisation with exceptional leadership, and it has been a pleasure supporting Mike Patton and his team to transform the business – more than doubling Caraustar’s size over our hold period. As a result, Caraustar has delivered an outstanding return for HIG and its investors.”
Rahul Vinnakota, Managing Director of HIG, says: “Partnering with a respected global organisation like Greif represents an exciting next step for Caraustar’s customers, partners, and employees, and we look forward to the Company’s continued success.”
Mike Patton, CEO of Caraustar, adds: “HIG has been thoughtful and supportive of Caraustar since we partnered together in 2013. In addition to supporting Caraustar’s aggressive M&A strategy, HIG has provided us the freedom and flexibility needed to grow the business organically and served as a value-added thought partner to our senior leadership team. Thanks to our affiliation with HIG, Caraustar is a much bigger and a more diversified company today than it was in 2013 – our customer base is broader and our relationships with them are deeper. We are excited to continue this next chapter with Greif, whose platform and resources will help us realise considerable opportunities ahead.”
Rothschild & Co was a financial advisor to Caraustar. Credit Suisse Securities (USA) LLC and Moelis & Company were also financial advisors. Ropes & Gray LLC and Axinn Veltrop Harkrider LLP represented Caraustar as legal counsel.

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