Cascades is selling its two US boxboard plants as part of its strategy to focus more on core packaging and tissue paper operations.
KINGSEY FALLS, Que.: Cascades Inc. is selling its two US boxboard plants to focus more on core packaging and tissue paper operations.
The Kingsey Falls, Que. manufacturer of green packaging and tissue paper sold its Versailles, Conn. mill and Hebron, Ky. plant to private equity firm OpenGate Capital for an undisclosed amount.
“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,” said Alain Lemaire, Cascades president and CEO.
He said the company intends to focus on modernizing its packaging and tissue paper facilities to improve productivity and profitability.
The Versailles mill, which employs 145 workers, makes coated recycled boxboard, and has an annual production capacity of 165,000 tons. The Hebron plant, where 85 people are employed, converts coated boxboard into approximately 20,000 tons of folding cartons annually.
Both facilities sell primarily to the US and Canadian food, health and beauty markets.
The sale is to be completed on June 23. Terms of the transaction were not disclosed, but Pierre Lacroix of Desjardins Securities said the transaction would generate about $20 million.
Cascades said it plans to use the proceeds from the sale to purchase new printing presses and other equipment for some of its remaining folding carton plants, while Canadian boxboard mills can expect future capital investments.
The sale leaves Cascades with seven boxboard locations in Quebec, Ontario and Winnipeg employing a total of 988 workers. It also has a facility in France employing some 350 workers and a Swedish plant employing 140.
The divestitures follow the sale earlier this year of food packaging company Dopaco to Reynolds Group for US$400 million and of the Avot-Vallee mill in France earlier this year to OpenGate Capital.
Files from Canadian Press