Private Equity Firm Acquiring Two Facilities from Cascades

OpenGate Capital, a private equity firm headquartered in Los Angeles, has signed an agreement to acquire two subsidiaries of Cascades Inc., a Kingsey Falls, Quebec-based paper company. The deal follows OpenGate’s acquisition of Norampac Avot-Vallee, also from Cascades, and Kotkamills, from Stora Enso, in February 2011. The deal is expected to be completed by the end of June 2011.

The assets being acquired include Cascades Boxboard Group - Connecticut LLC, a paperboard mill facility located in Versailles, Ct., and Cascades Boxboard US Inc., a Hebron, Ky., converting facility. The Versailles mill has an annual production capacity of 165,000 tons of recycled paperboard per year. The Hebron plant converts boxboard into about 20,000 tons of folding cartons per year.

In announcing the acquisition, Andrew Nikou, OpenGate Capital’s founder and managing partner, says, “These are classic, well-run manufacturing subsidiaries that have the untapped potential to be even better. Our industry expertise in wood and paper products will allow us to work with management and take an active role in the tactical direction of these companies.

“OpenGate’s specialized knowledge of the industry enabled us to quickly recognize what gems these subsidiaries are. In addition, the companies’ eco-friendly production of boxboard is appealing and in line with our firm’s sustainability philosophy,” Nikou adds.

Ghislain Levesque, general manager at the Versailles facility, adds, “We are eager to begin working with OpenGate on a variety of company initiatives to fuel our expansion. Our wide variety of ecological paperboard with excellent printability and dependable quality offer a multitude of uses and promise for additional applications. Our team welcomes OpenGate as a great partner to continuously elevate our commitment to excellence in serving our clients and innovating.”

In a press release issued by Cascades, Alain Lemaire, Cascades’ president and CEO, says, "The divestiture of the Versailles and Hebron facilities, following the sales of Dopaco and the Avot-Vallée mill announced earlier this year, is a further step in our overall strategy to gain more financial flexibility and streamline our portfolio of assets in order to better pursue the development of our core operations. We intend to continue focusing our efforts and investments toward modernizing our packaging and tissue paper facilities to improve productivity and profitability."