Cascades Inc., based in Kingsey Falls, Quebec, reached an agreement to sell Dopaco Inc., its converting business for the quick-service restaurant industry, to Reynolds Group Holdings Ltd. for US$400 million.
According to Cascades, net proceeds from the transaction will mainly be used to pay down debt, while the deal also includes a commitment from Dopaco to purchase boxboard from Cascades over the next five years.
“While we have always considered our ownership in Dopaco to be a good investment, I am pleased to announce this transaction which unlocks significant value for our shareholders,” said Alain Lemaire, President and CEO of Cascades. “In fact, this divestiture is part of our overall strategy to gain more financial flexibility and streamline our portfolio of assets to pursue the development of our core tissue, packaging and recovery operations.”
The transaction is expected to close before the end of April 2011.