Tobacco Rag Processors, Inc. ESOP

Client Profile
Tobacco Rag Processors, Inc. (“TRP” or the “Company”) is the largest independent value added processor and supplier of tobacco to the lower tier cigarette, machine rolled cigar and other value priced tobacco markets. Located in Wilson, NC, the Company has experienced impressive growth due to its outstanding customer service, competitive pricing facilitated by its substantial leaf tobacco inventory and flexible operating structure. The Company currently operates the largest of three independent tobacco processing facilities in the U. S. and has also developed an extensive low cost global network of tobacco leaf suppliers.
Situation
Due to complicated shareholder issues and for estate planning purposes, SSG and BB&T Capital Markets (“BB&T”) were retained by TRP to explore strategic alternatives, including a potential recapitalization of the Company.
Solution
After evaluating several alternative solutions, SSG and BB&T presented the equity holders with the idea of selling the Company to a newly created ESOP entity, Tobacco Rag Processors, Inc. Employee Stock Ownership Trust (“ESOP”). The transaction with ESOP simultaneously provided sufficient liquidity to equity holders while maintaining a strong and viable long term business for the benefit of the Company’s loyal base of employees. As part of this transaction, SSG and BB&T also facilitated the private placement of $75 million in senior secured credit facilities, which provided the capital for the ESOP to purchase the stock of TRP from its existing equity holders.