Wellstone Mills

Wellstone Mills is the second-largest producer of combed and carded ring-spun cotton yarn in the United States, primarily serving the knit, woven and military apparel sectors. The Company has over 40 years of experience in the U.S. yarn-spinning industry and is recognized for its innovation and specialty product development capabilities. 

Engagement Goals

Brookwood advised Wellstone on a transaction involving its four yarn-spinning facilities with Parkdale Mills, the largest manufacturer of spun yarn in the world. This transaction represents the 11th advisory assignment Brookwood professionals have led in the yarn-spinning sector. 

Engagement Process and Outcomes

Challenging Situation – Brookwood was initially engaged by the Company’s shareholders to pursue a range of recapitalization and liquidity options for the Company. However, in late-2009 and early-2010 as the global economy continued to face challenges and the Company’s financial performance deteriorated, the Company decided to pursue a sale of Wellstone’s operations to address near-term debt reduction requirements. 

Rapid Marketing Process – Brookwood leveraged its substantial yarn-spinning experience and industry-wide relationships to run a comprehensive – yet rapid – marketing process. Brookwood crafted compelling marketing materials which highlighted the significant facility-level opportunity for a strategic acquiror, as well as the potentially negative impact that Wellstone’s closure would have on both suppliers and customers. Brookwood contacted a broad set of buyer combinations, utilizing its industry knowledge to generate a creative set of alternatives. 

Timely Outcome – Brookwood’s effective marketing process generated a variety of transaction alternatives for the incumbent lender to consider within the timeframe allowed. Ultimately, Wellstone consummated a transaction with Parkdale Mills which offered: (i) an attractive economic package to address the Company’s lender requirements; (ii) a timely alternative with an efficient path to closing; and (iii) the ability to save approximately 450 jobs across the Company’s four operating facilities.