Planned Liquidation Converts to Highly Profitable Turnaround


Annual Sales



Midwest Paper Group, Appleton Wisconsin


Midwest Paper Mill with 3 processing lines. $250 million annual sales. EBITDA ($10) million.

  • The company was totally shut down and in a state court receivership due to lender defaults and insolvency. There were significant cash flow losses, an unfunded $60 million pension, non-accrual debt, and declining sales.
  • The company produced commodity grade white paper in an industry that was declining rapidly, had excess labor costs, an unfavorable collective bargaining contract, increasing raw material costs, and unsustainable operating costs.
  • The Receiver was forcing a quick sale process which left little time for a detailed due diligence process.
  • The capital costs and equipment upgrades needed to convert the facility to a more profitable brown fiber operation were estimated by potential buyers to be in excess of $35 million and would take two to three years to implement.
  • The Buyer’s intent was to liquidate the business.


  • MorrisAnderson (MA) worked for the Buyer and presented an offer of $21.5 million that included working with the Receiver over 90 days to allow the buyer and MA to evaluate a startup and transition plan to brown paper.
  • Evaluated available options and convinced the Buyer to forgo a quick $5 million gain on liquidation and reinvest its purchase price and $10 million more to fund a Turnaround Plan with the goal of converting the plant from less profitable white paper to the growing brown paper segment of the booming packaging industry.
  • Successfully negotiated with the union on a new lower-cost collective bargaining agreement and staged employee hiring.
  • Restarted operations with select employees to run out inventory, ran brown paper tests for conversion, worked with outside brokers to establish raw material buys and brown paper customers, collected outstanding receivables and evaluated management.
  • Converted 2 of 3 production lines to brown paper production.


  • Took a liquidation project and changed the owner’s strategy to a turnaround.
  • Brought back only key workers initially, negotiated a new union agreement, and established a brown paper processing plant conversion plan.
  • Now employ over 200 full-time employees
  • Completed conversion of equipment for $15 million and transitioned operation to a brown paper maker in 6 months; one-half the cost and one-fourth the time estimated by paper industry experts.
  • What once was a money-losing operation is now generating in excess of $20 million in annual EBITDA for a $30 million investment