Monomoy Capital pays under $240m for Mac Papers

PE firm acquires over $600m in revenue paper company for below average market rate.

Monomoy Capital Partners snapped up Mac Papers for a price that beats an industry average, PE Hub has learned.

The firm acquired the distributor of paper, packaging, wide format and envelope products for less than $240 million, or below 5x EBITDA, based on figures disclosed by a source close to the deal. Deals in the space typically trade at 5x to 6x EBITDA, the source said.

The family-owned paper supplier in the southeast has an EBITDA margin close to 8 percent, the source told PE Hub. Based upon the company’s annual sales of more than $600 million, as disclosed in a Friday announcement, that implies Mac Papers’ EBITDA stands at approximately $48 million.

“For a distributor of these products it [Mac Papers] has an above average EBITDA,” said Stephen Presser, a partner at Monomoy Capital. Presser clarified that the paper industry, generally, has been in decline for the seven or eight years.

Mac Papers, a regional distributor, will serve as a platform for further packaging-focused acquisitions that will be made this year and next. “We have already thought of some companies,” said Presser.

The sale process for Mac Papers was broad but narrowed down quickly, he said. Initiated by the company, it was smaller than a classic auction process with other financial sponsors in the mix, Presser said.

Monomoy Capital has been ramping up its portfolio of family-owned business acquisitions. Mac Papers represents the fifth family-owned investment for the PE firm in almost two years.

Mesirow Financial served as financial adviser on the sale, while Rogers Towers, P.A. provided legal.

Action Item: Check out Monomoy Capital’s latest Form ADV