Cascades acquires Ontario containerboard packaging plants

Company also announces increase in its equity holding of the Greenpac Mill

December 5, 2017
Purchasing B2B

KINGSEY FALLS, QC—Cascades Inc. announces 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 Corporation. The company also announces an increase in its equity holding of the Greenpac Mill LLC.

The company acquired the following four plants and specialize in the manufacturing of boxes and speciality products offering strong growth potential:

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

The transaction lets Cascades expand its presence in Ontario, to increase its production capacity by 500 million square-feet per year. These plants have procurement agreements with Greenpac, the company said, and as such the transaction will have little impact on Cascades’ integration rate.

Cascades has also acquired a 33-percent stake in Tencorr, a company specialized in manufacturing sheet stock for box producers. It has also acquired an additional interest in Containerboard Partners, one of Greenpac’s shareholders, thus increasing its holdings in Greenpac to 66.1 percent.

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.