The Berlin Daily Sun - Buyer of Gorham Mill Plans Major Investment in Facility

News Article

By Barbara Tetreault

The head of Gorham Paper LLC said his company not only has an agreement to purchase the paper mill at Cascade but also plans to invest millions in the facility.

After weeks of rumors, an announcement was released Friday that the newly formed company, owned by a group of private investors from Cate Street Capital, has an agreement with Counsel RB Capital LLC to purchase the mill.

John Halle, president of Cate Street Capital said the new owners are looking at a total investment of $60 million, including $25 million for a tissue machine. He hopes to close on the purchase by early April and reopen the mill immediately. The mill has been closed since November with most of its 240 employees laid off. Halle said he plans to rehire the laid-off papermakers.

Based in Portsmouth, Cate Street Capital is a private equity firm that has raised over $6 billion to finance more than 40 projects in the last 15 years. The firm specializes in renewable energy and green technology projects.

Halle said his firm was asked by local and state leaders to look at the Gorham mill because of its investment in Laidlaw Berlin BioPower.

Halle met first with Gorham mill manager Willis Blevins and liked his business plan for the facility. After meeting with Blevins, Halle said he decided to take a serious look at the plant.

Over the next few months, Cate Street Capital conducted extensive due diligence, visiting the mill and hiring paper industry experts to advise them. Both U.S. Senator Jeanne Shaheen and Gov. John Lynch met with Halle and pledged their support. Blevins agreed to remain as plant manager and delay his planned retirement for two years.

A press release announcing the agreement, said Gorham Paper believes it has put together a strategy to position the mill for long-term success and growth.

Asked about the number of companies that have looked at the facility and ultimately backed away, Shaheen said she believes Cate Street Capital has the means and expertise to carry out its plans for the facility. She said the firm was very methodical and in depth in conducting its due diligence -- more so she said then the other firms that announced plans or purchased the mill since the bankruptcy court put it on the market.

Shaheen was instrumental in assisting the state and local communities in coming up with the funding needed to connect the plant to the natural gas pipeline and to methane gas from the regional landfill. Local leaders called the gas pipeline, which is being undertaken by the Androscoggin Valley Regional Refuse Disposal District, critical to the sale of the mill by reducing energy costs.

Halle said he hopes to attract renewable energy and environmental technology companies to co-locate at both the Cascade site and the former pulp mill property in Berlin. He noted the area has a skilled workforce that includes machinists, electricians, and millwrights.

Laidlaw has received its permits to convert the former chemical recovery boiler into a 70-megawatt biomass plant. It is waiting for a decision from the Public Utilities Commission on its power purchase agreement with Public Service of N.H. The PUC has conducted five days of hearings on the agreement and is set to begin deliberations this week. A decision is expected within a month.

Halle also revealed that his firm is community-oriented. At the chamber of commerce dinner Friday night, Cate Street Capital and Laidlaw sponsored four tables.

"We're just trying to be good neighbors," Halle said.

Cutline - Berlin Mayor Paul Grenier chatted with Cate Street Capital President John Halle at Friday's Androscoggin Valley Chamber of Commerce annual meeting.

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