By PrintAction Staff
By PrintAction Staff
Cascades says it is acquiring four plants in Ontario to strengthen its position in the containerboard packaging sector, and the purchase of an ownership position in Tencorr Holdings Corp. The company also announces 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 Cascades president and CEO Mario Plourde.
Acquired from the Coyle family, the four following plants are geared toward the manufacturing of boxes and speciality products:
• McLeish Corr-a-Box Packaging & Design – Etobicoke
• Brown Packaging – Burlington
• Coyle Corrugated Containers Inc. – Scarborough
• Coyle Packaging (Peterborough) Ltd. – Peterborough
According to the company, the transaction will allow Cascades 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 this region. The plants already have procurement agreements with Greenpac, and as such the transaction will have little impact on Cascades’ integration rate, it notes.
Cascades has also acquired the Coyle family’s 33-percent 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 per cent from 62.5 percent. The company has been consolidating the Greenpac results since April 2017.
“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,” said Charles Malo, president and COO of Cascades Containerboard Packaging.
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.
Founded in 1964, Cascades produces, converts and markets packaging and tissue products composed mainly of recycled fibres.