Brentwood Seeks Buyer For Paper Source

Target: Paper Source

Multiple: 10x or more

Sponsor: Brentwood Associates

Financial Adviser: North Point Advisors

Brentwood Associates, which is out fundraising, has put Paper Source on the block, three sources told sister website peHUB.

Chicago-based Paper Source, a stationery store chain, is producing EBITDA in the mid-teens, one buyout source said. North Point Advisors is advising on the sale, the sources said.

The auction is expected to be very hot and Paper Source could sell for 10x or more, sources say.

Sue Lindstrom founded the first Paper Source store in Chicago in 1983, according to the company’s website. The company offers fine and artisanal papers and custom note pads, as well as wedding and baby shower invitations. The company operated 50 stores nationwide as of April 2012.

Paper Source’s logo features a paper wasp which it calls its patron insect. “The diligent paper wasp creates its nest by chewing bark and leaves into a paper-like pulp, and thus receives our affectionate designation as the original paper maker,” Paper Source says.

Brentwood invested in Paper Source in 2007 and acquired a majority stake. It’s unclear how much the firm invested, but Paper Source paid out a dividend in May, peHUB reported.

News of the sale comes as Brentwood is out fundraising for its latest fund. Brentwood Associates Private Equity V LP has a $500 million target, peHUB has reported.

Los Angeles-based Brentwood targets mid-market companies in sectors such as health and wellness, restaurants, specialty retail and consumer products and services. Brentwood typically invests $20 million to $100 million in a deal, the firm’s website says.

Executives at Brentwood, Paper Source and North Point could not immediately be reached for comment.

Luisa Beltran is a senior writer for peHUB; additional reporting by Olivia Oran.