H.I.G. Capital said Monday it has completed its buy of Caraustar Industries. Financial terms weren’t announced. Wayzata Investment Partners, the seller, had owned a majority of Caraustar. Credit Suisse Securities, Goldman Sachs Bank USA, Jefferies LLC and Wells Fargo Capital Finance are providing financing. Jefferies provided financial advice to Caraustar while Credit Suisse advised H.I.G. while Ropes & Gray was their attorney. Clifton, N.J.-based Caraustar makes 100% recycled paperboard and converted paperboard products
H.I.G. Capital, LLC, a leading global private equity investment firm, announced today that an affiliate completed the acquisition of Caraustar Industries, Inc., a leading provider of recycled paperboard and related products. Caraustar was majority owned by private investment funds managed by Wayzata Investment Partners LLC.
Headquartered in Austell, GA, Caraustar is one of North America’s largest integrated manufacturers and converters of 100% 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 fiber in the United States. 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, CEO of Caraustar, commented, “We believe this is an exciting time in our industry, and I am pleased to have H.I.G.’s support to help us achieve our growth plan. We look forward to working with H.I.G. to build upon our reputation as a customer-oriented market leader.”
“We are very excited about the Caraustar opportunity,” added Tenno Tsai, a Principal of H.I.G. “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) LLC, Goldman Sachs Bank USA, Jefferies LLC and Wells Fargo Capital Finance. Jefferies LLC was financial advisor to Caraustar. Credit Suisse Securities (USA) LLC was financial advisor to H.I.G. Capital.
About Caraustar Industries
Caraustar Industries, Inc. is one of North America’s largest integrated manufacturers of 100% recycled paperboard and converted paperboard products. The company is a socially responsible corporation, is committed to environmentally sound practices and is dedicated to providing customers with outstanding value through innovative products and services. Caraustar has developed its leadership position in the industry through diversification and integration from raw materials to finished products. Caraustar serves the four principal recycled boxboard product end-use markets: tubes and cores; folding cartons; gypsum facing paper and specialty paperboard products. For additional information on Caraustar, please visit the company’s website at www.caraustar.com.
Based in Wayzata, Minnesota, Wayzata Investment Partners LLC is an SEC registered investment advisor to private investment funds with in excess of $7 billion in assets under management.
About H.I.G. Capital
H.I.G. is a leading global private equity investment firm with more than $12 billion of equity capital under management. Based in Miami, and with offices in Atlanta, Boston, Chicago, Dallas, New York, and San Francisco in the U.S., as well as international affiliate offices in London, Hamburg, Madrid, Paris, and Rio de Janeiro, H.I.G. specializes in providing capital to small and medium-sized companies with attractive growth potential. H.I.G. invests in management-led buyouts and recapitalizations of profitable and well managed manufacturing or service businesses. H.I.G. also has extensive experience with financial restructurings and operational turnarounds. Since its founding in 1993, H.I.G. invested in and managed more than 200 companies worldwide. The firm’s current portfolio includes more than 70 companies. For more information, please refer to the H.I.G. website at www.higcapital.com.