Manchester investment firm looks to buy Cascade mill
June 02, 2010
GORHAM — There's a light at the end of the tunnel for employees at the Cascade paper mill.
Fraser Paper, the Canadian company that owns the mill, announced last week they have found a buyer for the mill. Fraser declared bankruptcy in June of last year. They have been trying to find a buyer for the Cascade mill.
The perspective buyer is MerchantBanc, of Manchester. Founded in 1992, MerchantBanc is a private investment firm that invests in companies poised to grow, according to their website. Their investments are throughout New England, their website says.
The details of the deal between MerchantBanc and Fraser Paper have not been disclosed, but MerchantBanc president Jeff Pollock said he sees growth potential at the mill.
"We quickly realized there is a very good opportunity at the Gorham mill that Fraser couldn't execute," he said.
That opportunity is changing the fuel source for the boilers from oil to natural gas, he said, which will drastically improve their business model.
The Androscoggin Valley Regional Refuse Disposal District is already moving forward with plans to pipe landfill gas to the mill, which will tie in with the overall conversion to natural gas.
"It's a win win for everybody," he said.
"We're still working out the details," said Willis Blevins, general manager of the Cascade mill. "A whole lot of things still have to happen."
But, he said, this is a step in the right direction for the mill.
"Overall it's fantastic news," he said; the promise of a buyer is "a light at end of the tunnel" for the employees.
There is still a two month window, however, before the sale will be final.
"We hope to close the week of July 19," Mr. Blevins said, and lots of things have to happen before then.
Ultimately, he said, the bankruptcy court has to approve the sale.
If the sale does go through, however, it will preserve of more than 200 jobs, and it may mean more jobs in the future.
"Our goal is to become a bigger and more profitable mill down the road," Mr. Pollock said.
The mill is incredibly well run, he said, with an excellent workforce. Converting the fuel source is all it needs to be viable, he said. "Here it's simply a matter of putting this into place."
MerchantBanc isn't looking for a quick sale of mill, he said. "We invest for the longer term."
Most of their assets, he said, MerchantBanc has held for five years or more. The plan is no different for the Cascade mill, he said.
Mr. Pollock credits Department of Resources and Economic Development Commissioner George Bald with connecting his company with the Frasier. He also credits Mr. Blevins and the mill workers for "producing a good product and doing it well," which makes the transition possible.