CASE STUDIES

Lincoln Paper & Tissue LLC (“Lincoln” or the “Company”) makes short-run “higher-end/niche” paper and tissue products, including deep-dyed party napkins and business reply cards.

Company's Situation – Lincoln was acquired out of Chapter 7 by management, clear of any legacy environmental issues and with a flexible, affordable union contract.  The new owners used their capital to finance the restart of the mill, but lacked the funds to expand tissue production to take advantage of excess pulp capacity and fulfill increasing demand for private-label tissue.  The Company needed a total of $69 million to build a third tissue machine which would double tissue output for the Company.  Existing equity holders wished to minimize the dilution of the financing, however, potential capital sources struggled to estimate the restart costs and run-rate earnings of the mill because it lacked long-standing operating history since its restart. 

PCG CP Solution – PCG CP developed a $69 million growth financing that minimized dilution.  PCG CP invested $36.5 million in subordinated notes and LLC interests.  A bank facility provided an additional $32.5 million.

Performance Since PCG CP Investment – With its financing complete, Lincoln has installed a new 100 ton per day state-of-the art tissue production line.  The mill no longer generates excess pulp and efficiency of the base mill has improved.  In 2007, Lincoln continues to improve the capabilities of the mill with the installation of a new turbine generator that will increase Lincoln’s energy self-sufficiency.  Current run-rate EBITDA has more than doubled from the time of PCG CP ’s investment.

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