Cascades Acquires Four Containerboard Packaging Plants, Increases Ownership in Greenpac

Cascades Inc., Kingsey Falls, Que., Canada, has acquired four plants in Ontario to strengthen its position in the containerboard packaging sector. The company also announced the purchase of an ownership position in Tencorr Holdings Corp. and 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.

The four following plants were acquired from the Coyle family, and specialize in the manufacturing of boxes and specialty products offering strong growth potential:

• McLeish Corr-a-Box Packaging & Design – Etobicoke, Ont. 
• Brown Packaging – Burlington, Ont. 
• •Coyle Corrugated Containers Inc. – Scarborough, Ont. 
• Coyle Packaging (Peterborough) Ltd. – Peterborough, Ont.

This transaction will allow Cascades to expand its presence in Ontario, to increase its production capacity by 500 million sq. ft. per year, and to strengthen its ability to serve customers in this region. These plants already have procurement agreements with Greenpac, and as such the transaction will have little impact on Cascades' integration rate. 

Cascades has also acquired the Coyle family's 33% 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% from 62.5%. The company has been consolidating the Greenpac results since April 2017. 

  

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.

"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.