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H.I.G. Capital Completes the Sale of Caraustar Industries for $1.8 Billion
NEW YORK – February 11, 2019 – H.I.G. Capital (“H.I.G.”), a leading global private equity investment firm with $30 billion of equity capital under management, is pleased to announce the completion of the sale of its portfolio company Caraustar Industries, Inc. (“Caraustar” or the “Company”) to Greif, Inc. (NYSE: GEF, GEF.B) for $1.8 billion.
Headquartered in Austell, GA, Caraustar is a market leader in the production of uncoated recycled paperboard (URB) and coated recycled paperboard (CRB), with a variety of applications that include tubes and cores and a diverse mix of specialty products. Additionally, 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.
H.I.G. acquired Caraustar in May 2013 in partnership with Caraustar management, and has since more than doubled revenue and profitability through organic investment and both transformative and tuck-in acquisitions.
Tenno Tsai, Managing Director of H.I.G., said: “As a leader in the recycled paperboard and packaging solutions market, Caraustar’s ability to deliver a broad product portfolio to a national customer base via a low cost, vertically integrated manufacturing network provides a value proposition unmatched in the industry. Caraustar is a terrific organization with exceptional leadership, and it has been a pleasure supporting Mike Patton and his team to transform the business – more than doubling Caraustar’s size over our hold period. As a result, Caraustar has delivered an outstanding return for H.I.G. and its investors.”
Rahul Vinnakota, Managing Director of H.I.G., further commented, “Partnering with a respected global organization like Greif represents an exciting next step for Caraustar’s customers, partners, and employees, and we look forward to the Company’s continued success.”
Mike Patton, CEO of Caraustar, added: “H.I.G. has been thoughtful and supportive of Caraustar since we partnered together in 2013. In addition to supporting Caraustar’s aggressive M&A strategy, H.I.G. has provided us the freedom and flexibility needed to grow the business organically and served as a value-added thought partner to our senior leadership team. Thanks to our affiliation with H.I.G., Caraustar is a much bigger and a more diversified company today than it was in 2013 – our customer base is broader and our relationships with them are deeper. We are excited to continue this next chapter with Greif, whose platform and resources will help us realize considerable opportunities ahead.”
Rothschild & Co was a financial advisor to Caraustar. Credit Suisse Securities (USA) LLC and Moelis & Company were also financial advisors. Ropes & Gray LLC and Axinn Veltrop Harkrider LLP represented Caraustar as legal counsel.
Caraustar Industries, Inc. is a leader in the manufacturing of high-quality recycled materials and paper 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's four business lines include Recycling Services, Mill Group (coated and uncoated paperboard and specialty paperboard products), Industrial Products Group (tubes and cores, construction products, protective packaging, adhesives) and Consumer Packaging (folding cartons, set-up boxes, packaging services). Caraustar serves the four principal recycled boxboard product end-use segments: tubes and cores; folding cartons; gypsum facing paper; and specialty paperboard products.
About H.I.G. Capital
H.I.G. is a leading global private equity and alternative assets investment firm with $30 billion of equity capital under management.* Based in Miami, and with offices in New York, Boston, Chicago, Dallas, Los Angeles, San Francisco, and Atlanta in the U.S., as well as international affiliate offices in London, Hamburg, Madrid, Milan, Paris, Bogotá, Rio de Janeiro and São Paulo, H.I.G. specializes in providing both debt and equity capital to small and mid-sized companies, utilizing a flexible and operationally focused/ value-added approach:
- H.I.G.’s equity funds invest in management buyouts, recapitalizations and corporate carve-outs of both profitable as well as underperforming manufacturing and service businesses.
- H.I.G.’s debt funds invest in senior, unitranche and junior debt financing to companies across the size spectrum, both on a primary (direct origination) basis, as well as in the secondary markets. H.I.G. is also a leading CLO manager, through its WhiteHorse family of vehicles, and manages a publicly traded BDC, WhiteHorse Finance.
- H.I.G.’s real estate funds invest in value-added properties, which can benefit from improved asset management practices.
Since its founding in 1993, H.I.G. has invested in and managed more than 300 companies worldwide. The firm's current portfolio includes more than 100 companies with combined sales in excess of $30 billion. For more information, please refer to the H.I.G. website at www.higcapital.com.
* Based on total capital commitments managed by H.I.G. Capital and affiliates.