Sofidel Acquires Royal Paper
Private label paper goods supplier Sofidel America is acquiring “substantially all assets” of Royal Paper as the two companies have entered into an asset purchase agreement.
To facilitate the transaction, Royal has filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Delaware. According to a press release from Royal, the action is expected to provide for a quick and orderly sale of the company with Sofidel serving as the "stalking horse bidder" in a court-supervised auction and sale process.
The agreement with Sofidel remains subject to court approval and other customary conditions, including the receipt of any required regulatory approvals. The Sofidel APA is subject to higher and otherwise better offers received in the court-supervised process.
Royal officials said the company intends to move through this process while operating as normal. In connection with the proposed sale transaction, Royal has received a commitment for debtor-in-possession (DIP) financing from its existing secured lenders to support the business through the sale process. The company intends to pay vendors, suppliers, and other trade creditors in full under normal terms for goods and services provided during the bankruptcy case.
"Our team has been working diligently to strengthen our financial foundation in the face of difficult macroeconomic circumstances and other challenges facing Royal,” said Steve Schoembs, CEO of Royal Paper. "Entering into an agreement with Sofidel provides stability for our business, its customers, and our employees, while we continue to run our sale process."
