Patriarch Partners, a private equity firm and holding company that currently manages 74 companies with annual revenues of more than USD8 billion, has completed the acquisition of the Gorham (New Hampshire) paper mill from FP Acquisitions LLC, a wholly owned subsidiary of Counsel RB Capital, LLC. Patriarch intends to begin the process of refurbishing the paper mill promptly and expects production to resume within four to five weeks.
“We are extremely excited to have finalised this transaction and look forward to the journey of rebuilding and revitalising the business,” says Lynn Tilton (pictured), founder and CEO of Patriarch. “Patriarch is committed to turning around distressed and dormant businesses with the dual goal of building portfolio value while sustaining and creating jobs in America. This acquisition presents an opportunity to achieve both goals as we rehire the mill’s workforce and make the necessary investments and operational changes to return the company to long-term profitability.”
Gorham currently has three paper producing machines – a towel machine and two specialty paper machines. The towel machine is expected to resume production within 30 days, and the two specialty paper machines are expected to begin to operate within 90 days. Patriarch intends to re-hire approximately 200 union workers and management during the next several months, including plant manager Willis Blevins.
“I am honored to have Mr Blevins as part of our senior management team,” says Tilton. “He has extensive, valuable experience managing the mill and is highly respected by the union workers and the entire Gorham community. In addition, he shares our dedication, work ethic and commitment to ensure the mill will operate successfully.”
Through its investment funds, Patriarch intends to make the significant capital expenditures and operational changes necessary to return Gorham Paper and Tissue to profitability, including a plan to acquire and install a tissue paper machine, which is expected to take 12-15 months, at a cost of USD35 million and result in approximately 30 new jobs once it is operational.
The firm also will invest in the installation of a gas pipeline and the conversion of the mill’s boilers to allow the mill to switch its main power source from oil to gas. The gas conversion is expected to take 5-6 months and result in significant cost savings.
Finally, Patriarch plans to take advantage of synergies within its own portfolio. It is expected that a portion of the pulp utilized at Gorham will be produced at Patriarch’s Old Town mill in Old Town, Maine.
“While there is a lot of work to be done to restore this business, and it will take time to rebuild a mill that had been shuttered and left to liquidation, we are confident that we have a plan to achieve long-term success,” says Tilton. “Our hope is not only that we will be able to turn around this business and restore jobs, but also that a thriving mill in Gorham will have a positive impact on the town and surrounding area.”
