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Hackman Capital Partners leads consortium of investors in purchase of Arizona Paper Mill assets

Hackman Capital Partners, LLC., confirmed the successful acquisition of Catalyst Paper's shuttered paper mill and certain other assets located in Snowflake, Arizona. Catalyst Paper, western North America's largest producer of mechanical printing paper, closed the Snowflake facility in September. Catalyst’s assets were sold at auction in New York City on December 17, 2012, as part of restructuring proceedings in a Chapter 15 bankruptcy matter filed in Delaware. The assets sold at auction to the Hackman-led consortium consisted primarily of the paper mill improvements and personal property and 19,000 acres of real property. In a separate transaction through the auction, the Snowflake Community Foundation acquired the Apache Railroad Company and its 45 miles of track, which serve an important economic development purpose for the entire Snowflake community. 

The consortium of investors, led by Hackman Capital, includes Hackman Capital Equipment Fund, PPL Group of Northbrook, IL, Capital Recovery Group of Enfield, CT, Rabin Worldwide of San Francisco, CA and community stakeholder Aztec Land and Cattle Company Limited of Phoenix, AZ.  The transaction received state and local support based upon the investors’ willingness to structure the acquisition so that the Apache Railroad could be purchased from the estate by the Snowflake Community Foundation.  

“We understood the importance of the Apache Railway to the community," said Michael Hackman, founder and CEO of Hackman Capital, “Apache Railway’s ability to provide low-cost transport of transcontinental freight is an important amenity that will hopefully  advance economic growth for the area.” 

Hackman noted that his firm has significant experience and sophistication dealing in complex transactions of this nature.  Because Catalyst removed certain parts of the plant to prevent the facility from being operated as a paper mill going forward, the consortiums will liquidate the structures and equipment over the next 12 months.   

The acquisition also included 19,000 acres of land comprised of 3,000 acres of industrial land and 16,000 acres of grazing and farm land.  In addition, the land includes an operating well field consisting of 8 wells and 11 miles of pipeline with the capacity to pump 18,000 acre feet of water per day.  The investor group is studying plans on how best to utilize the water distribution capacity. 

“The liquidation is a daunting undertaking based upon the huge size of the facility; however, there are significant equipment and other assets that will draw real interest from buyers,” said William Firestone of Capital Recovery Group.   

Capital Recovery Group, Rabin Worldwide, and PPL are seasoned experts in capital asset recovery and operate on a world-wide basis.  Hackman attributes the sophisticated thinking and strong partnership between the buying group and state and local leaders for the success of the acquisition.

"There were approximately 22 bidders for the assets at the auction.  Hackman Capital and the investor group were the only group that reached out to the community stakeholders in advance of the bankruptcy sale,” said Steve Brophy of the Aztec Land and Cattle Company.  

Hackman noted that “none of this would be possible without our partners and the efforts of Governor Brewer’s office, Mayor Willis of Snowflake, the Snowflake Town Council, Henry Darwin and his colleagues at Arizona Department of Environmental Quality, Vanessa Hickman and the State Land Department, and Sandra Watson and Keith Watkins of the Arizona Commerce Authority.”