Pixelle paper mills to change hands

New York-based private equity firm Lindsay Goldberg says it has entered into an agreement to sell Pixelle Specialty Solutions LLC to Miami-based H.I.G. Capital. Pixelle operates virgin-fiber specialty paper and packaging mills in Jay, Maine; Chillicothe, Ohio; Spring Grove, Pennsylvania; and Stevens Point, Wisconsin.

H.I.G. Capital describes itself as a global alternative investment firm with $48 billion of equity capital under management. H.I.G. formerly owned recycled-content paperboard producer Caraustar Industries but sold it to Greif in 2019.

Earlier this year, H.I.G. sold paper producer Sustana to a unit of New York-based Blackstone. Last year, it purchased North Carolina recycled-content board producer Jackson Paper Manufacturing and it also owns recycling equipment maker Wastequip.  

Collectively the four Pixelle mills operate 11 paper machines and produce more than 1 million tons of paper annually, according to Lindsay Goldberg.

“Together with Lindsay Goldberg, Pixelle has developed a broad, innovative portfolio of industry-leading brands across the specialty papers and sustainable packaging markets,” states Pixelle CEO Timothy Hess. “In under four years, we have transformed Pixelle into the leading specialty-focused paper producer in North America through three strategic acquisitions and successful implementation of a continuous improvement program. We thank Lindsay Goldberg for their partnership and look forward to our next chapter with H.I.G. Capital.”

Credit Suisse served as lead financial advisor to Pixelle on the transaction while Houlihan Lokey also served as financial advisor to Pixelle. Cravath, Swaine & Moore LLP served as legal advisor to Pixelle. Credit Suisse and Macquarie Capital are providing “committed financing in support of the transaction,” says Lindsay Goldberg. Macquarie Capital and Jefferies acted as financial advisors and Ropes & Gray LLP provided legal advice to H.I.G. Capital.

The transaction, terms of which were not disclosed, is subject to conditions and regulatory approvals and is expected to close in the second quarter of this year.