Friday, October 31, 2008

Patriarch buys Maine paper mill for $19M, to convert to ethanol

New York-based investment firm Patriarch Partners has acquired the former Red Shield Environmental LLC paper mill in Old Town, Maine, for $18.9 million, with the intention of converting the mill into an ethanol production facility, according to reports.

Patriarch Partners bought the mill via auction, after Red Shield declared bankruptcy last June. The deal has been approved by a federal bankruptcy judge. Patriarch is  a private equity firm focused on distressed businesses.

The facility, originally owned by Georgia-Pacific, employed a workforce of 400 when it was shut down in 2006. Patriarch Partners intends to reopen the plant, though no timetable was given. According to a report from the Associated Press, officials at Patriarch aim to open the facility “as soon as possible.”

Red Shield acquired the mill in 2006 and resumed pulp production with the aim of converting the plant to an ethanol production facility, but the company laid off 160 workers and filed for bankruptcy last spring. During its tenure as the owner and operator of the facility, Red Shield also landed a $30 million grant from the U.S. Department of Energy in conjunction with the University of Maine to help transfer research and technology from the university to the production facility. According to reports, that grant will be transferred to the new owners.