Patriarch Partners completes acquisition of closed Gorham, New Hampshire, paper mill from Counsel RB Capital, intends to begin refurbishing paper mill, resume production in four to five weeks
May 13, 2011
– Patriarch Partners, LLC (“Patriarch”), a private equity firm and holding company that currently manages 74 companies with annual revenues of more than $8 billion, announced today that Patriarch managed investment funds have completed the acquisition of the Gorham (New Hampshire) paper mill (“Gorham Paper and Tissue” or “Gorham”) 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 finalized this transaction and look forward to the journey of rebuilding and revitalizing the business,” said Lynn Tilton, 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,” Ms. Tilton said. “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.”
“I personally want to thank Lynn for her dedication and commitment to putting people back to work,” said Mr. Blevins. “This area needed an economic shot in the arm, and Lynn Tilton has made the commitment to re-start the mill and invest in its long-term viability, including a tissue machine and gas line project, to make Gorham globally competitive.”
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 $35 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,” said Ms. 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.”
New Hampshire Governor John Lynch said, “This is a great day for Gorham and Berlin, the North Country and the entire State of New Hampshire. This mill is important to the North Country economy, and it's important that we keep our workers employed. And we all recognize it is because of the workers – and their skills and strong work ethic – that made this agreement possible. I want to thank Patriarch for recognizing what an asset this mill truly is. Patriarch is a company with a successful track record and commitment to manufacturing, and we are very pleased they are choosing to invest in the hard working men and women of the North Country.”
“There are a number of people whose efforts were instrumental in getting this deal finalized,” said Ms. Tilton, “including Governor Lynch, George Bald, Commissioner of the New Hampshire Department of Resources & Economic Development, and Sharon Gauthier, Executive Director, Androscoggin Valley Regional Refuse Disposal District. I am extremely grateful for their support and hard work. I also greatly appreciate the support we received from the United Steel Workers Union, Local 75, and I look forward to working with its leadership and members.”
ABOUT PATRIARCH PARTNERS, LLC:
Patriarch Partners, LLC, is a private equity firm and holding company managing 74 companies with annual revenues of more than $8 billion. Founded by Wall Street veteran Lynn Tilton in 2000, Patriarch is dedicated to saving American manufacturing jobs by saving American companies that have fallen from economic favor. Since its inception, Patriarch has bought more than 150 companies, and in so doing has saved over 250,000 jobs. Patriarch’s portfolio includes a broad range of industrial concerns including Dura Automotive, American LaFrance, Denali, and MD Helicopters, in addition to iconic American brands such as Rand McNally, Spiegel Catalogs and Stila Cosmetics. Under Ms. Tilton's leadership, Patriarch has become the largest woman-owned business in America employing more than 120,000 employees. For more information, please visit: www.patriarchpartners.com.
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