Cascades Inc., Kingsey Falls, Quebec, has announced the acquisition of four plants in Ontario to strengthen its position in the containerboard packaging sector and the purchase of an ownership position in Tencorr Holdings Corp. In addition, the company has increased its equity holding of Greenpac Mill LLC in Niagara Falls, New York.
Greenpac Mill is a partnership between Cascades, Caisse de dépôt et placement du Québec, Jamestown Container and Containerboard Partners for the purpose of constructing and operating a containerboard mill, according to its website. Cascades has acquired an additional interest in Containerboard Partners, one of Greenpac’s shareholders, thus increasing its holdings in Greenpac to 66.1 percent from 62.5 percent. Cascades says it has been consolidating the Greenpac results since April 2017.
“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,” says Cascades President and CEO Mario Plourde.
The following four Ontario plants were acquired from the Coyle family and specialize in the manufacturing of boxes and specialty products offering strong growth potential, says Cascades:
- McLeish Corr-a-Box Packaging & Design, Etobicoke, Ontario;
- Brown Packaging, Burlington, Ontario;
- Coyle Corrugated Containers Inc., Scarborough, Ontario; and
- Coyle Packaging (Peterborough) Ltd., Peterborough, Ontario.
This transaction will allow Cascades to expand its presence in Ontario, to increase its production capacity by 500 million square feet per year and to strengthen its ability to serve customers in this region, according to the company. These plants already have procurement agreements with Greenpac, and as such the transaction will have little impact on Cascades’ integration rate.
Cascades also has acquired the Coyle family’s 33 percent stake in Tencorr, a company specialized in manufacturing sheet stock for box producers.
The total cost of the transaction is $49 million, of which $21 million is related to the increased stake in Greenpac and its new position in Tencorr, Cascades says. 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.
“These new assets will support our growth by providing us with increased capacity and flexibility,” says Charles Malo, president and chief operating officer of Cascades Containerboard Packaging. “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 fibers.