Cascades Acquires Containerboard Packaging Plants in Ontario and Increases Its Ownership in Greenpac
Cascades acquired four corruaged box and packaging plants in Ontario, Canada that will increase its production capacity by 500 million square feet per year.
Dec. 4, 2017 - Cascades Inc. today announced the acquisition of four plants in Ontario, Canada to strengthen its position in the containerboard packaging sector, and the purchase of an ownership position in Tencorr Holdings Corporation.
Cascades also announced an increase in its equity holding of the Greenpac Mill LLC.
“We are very pleased to expand our presence in Ontario and increase our stake in Greenpac for the second time this year. These transactions align perfectly with our vision and strategy for our containerboard activities,” said Mario Plourde, President and CEO of Cascades.
The following four plants were acquired from the Coyle family, and specialize in the manufacturing of boxes and specialty products:
- McLeish Corr -a-Box Packaging & Design (Etobicoke, Ontario)
- Brown Packaging (Burlington, Ontario)
- Coyle Corrugated Containers Inc. (Scarborough, Ontario)
- Coyle Packaging ( Peterborough ) Ltd. (Peterborough, Ontario)
Cascades said the transaction will allow it to expand its presence in Ontario, increase its production capacity by 500 million square feet per year, and strengthen its ability to serve customers in that region.
In addition, the plants already have procurement agreements with Greenpac, and as such the transaction will have little impact on Cascades' integration rate.
Cascades has also acquired the Coyle family's 33% stake in Tencorr, a company specialized in manufacturing sheet stock for box producers.
Furthermore, Cascades has also acquired an additional interest in Containerboard Partners, one of Greenpac's shareholders, thus increasing its holdings in Greenpac to 66.1% from 62.5%.
The total cost of the transaction amounts to $49 million, of which $21 million is related to the increased stake in Greenpac and its new position in Tencorr. The containerboard packaging plants were acquired for a consideration of $28 million, including an assumed debt of $4 million, which represents a multiple of 6.5 times the adjusted operating income before depreciation of these operations, and excludes anticipated synergies.
Charles Malo, President and Chief Operating Officer of Cascades Containerboard Packaging, said, “These new assets will support our growth by providing us with increased capacity and flexibility. This transaction will also enable us to better serve our customers as we will be better positioned to provide them with the packaging solutions they seek. I would also like to welcome all of the employees of these new plants to Cascades.”
Founded in 1964, Cascades produces, converts and markets packaging and tissue products composed mainly of recycled fibres. To learn more, please visit: www.cascades.com.
SOURCE: Cascades, Inc.