Royal Paper, LLC, a Phoenix-based vertically integrated tissue manufacturer, produces bath tissue, paper towels, facial tissue, and napkins for major U.S. retail chains, including Trader Joe’s, Aldi, Whole Foods, Kroger, and Meijer. It also produces 100 percent recycled paper products under its Earth First brand. Founded in 1992, the Company was once one of the leading privately-owned tissue manufacturers in the United States and grew into a national supplier serving both the retail and away-from-home markets, generating roughly $220 million in annual revenue. Royal Paper operated a 61,000-metric-ton paper mill in Gila Bend, Arizona and three converting facilities across Arizona and South Carolina. By early 2024, operational disruptions, inefficient product proliferation, and tightening credit terms left the Company facing an acute liquidity crisis. Lenders anticipated up to $90 million in losses and prepared for a potential liquidation.
Novo Advisors was retained in 2024 and stepped into the role of Chief Restructuring Officer to stabilize operations, preserve collateral value, and evaluate strategic options under severe time constraints.
It was immediately clear to the Novo Advisors’ team the Company suffered inefficiencies in its plant operations and customers placed fewer orders following missed deliveries. Novo quickly recommended and instituted a “strategic shrink,” cutting Royal Paper’s customer base by 95% to focus on nine key customers that represented two-thirds of revenue to extend liquidity, sustain operations, and maximize liquidity.
Novo Advisors navigated a highly fragmented and at-times adversarial stakeholder group, aligning parties with competing interests around a consensual agreement to fund the Company through a sale process. Novo leveraged its trusted relationship with an investment bank to stabilize the situation and support a value-maximizing transaction.
Partner Michael Ragano on strategy.
Founder and Managing Partner Sandeep Gupta on the complexity of this deal.
Partner Michael Ragano on the auction process.
Partner Michael Ragano and Senior Consultants Grant Filer, Bettina Meske, and Jack Robinson.
