Transactions

Riverside Paper Company

Selling to a major competitor – balancing the disclosure of competitive information and the desire to maximize value …

Situation
Riverside Paper Company is a leading manufacturer and distributor of specialty paper, and art and stationary paper products for the school, office products and retail markets.

The Company’s board decided to sell, and wanted to run a full marketing process in order to make an informed recommendation to the shareholders. The board also recognized that the best value may come from the Company’s #1 rival, Pacon, an experienced acquirer with a known interest.

Given the highly competitive nature of the relationship, and concurrent marketing to other prospects less knowledgeable about the Company, the marketing process needed to incorporate a staged and custom approach to each group of buyers, which included other competitors, complementary corporate buyers and strategic private equity groups.

Scope of Mertz’s role
Mertz managed the divestiture process, working with management to develop compelling offering materials and assisting the Company in negotiations and evaluating overall strategic options. Mertz brought the best potential purchasers to the table by identifying multiple strategic acquirers and highlighting Riverside’s strengths, opportunities and potential synergies.

A key to maximizing value was including Pacon in the marketing process, while very carefully managing the flow of competitive information. This gave Pacon enough information to recognize and quantify value, and in the end, resulted in a successful sale to Pacon.

Mertz’s value add
Mertz successfully developed interest from the best buyers, while concurrently managing the flow of information to the #1 competitor. This process resulted in several competing offers and allowed the shareholders to maximize value.