Strateline Acquires Sustainable Solutons

Strateline Industries, a Rogers, Ark.-based manufacturer of nonwoven substrates from recycled materials, has acquired Wagoner, Okla.-based Sustainable Solutions Inc. (SSI), its upstream supplier of regenerated fiber from textile waste, from Meriturn Partners LLC - an investment firm with offices in Raleigh, N.C., and San Francisco that specializes in corporate restructurings, turnarounds and recapitalizations. Meriturn invested in SSI in November 2006 as part of a management buyout and company restructuring.

The acquisition will enable Strateline to vertically integrate its operations by bringing SSI's fiber regeneration capabilities in-house, and expand its sustainable product offerings beyond nonwovens.

"The transaction provides considerable synergies for booth Strateline and SSI, and the board felt all parties would benefit from the immediate combination but also from the future prospects," said Lee Hansen, a partner with Meriturn and chairman of SSI. "As such, we structured the transaction so the parties could take part in the combined upside."

Strateline is purchasing SSI's assets and assuming unsecured liabilities. Under the terms of the closing, SSI's secured lender, Tulsa, Okla.-based Arvest Bank, will be repaid. Equity holders will receive sale proceeds as well as future royalties.

March 11, 2008