Cascades to sell Dopaco for $440 million
By Canadian Packaging Staff
General Cascades Inc. Converting Dopaco Green Packaging Reynolds GroupCascades Inc., a global leader in the recovery of recyclable materials and the manufacturing of green packaging and tissue paper products and headquartered in Kingsey Falls, Que., has announced it has entered into an agreement for the sale of Dopaco Inc., its converting business for the quick-service restaurant industry, to Reynolds Group Holdings Limited for a cash consideration of US$400 million.
Cascades Inc., a global leader in the recovery of recyclable materials and the manufacturing of green packaging and tissue paper products and headquartered in Kingsey Falls, Que., has announced it has entered into an agreement for the sale of Dopaco Inc., its converting business for the quick-service restaurant industry, to Reynolds Group Holdings Limited for a cash consideration of US$400 million.
Net proceeds from the transaction will mainly be used to pay down Cascades’ debt. In connection with the transaction, Cascades will continue to supply boxboard to Dopaco, through a five-year supply agreement.
Alain Lemaire, president and chief executive officer of Cascades, says: “While we have always considered our ownership in Dopaco to be a good investment, I am pleased to announce this transaction which unlocks significant value for our shareholders. In fact, this divestiture is part of our overall strategy to gain more financial flexibility and streamline our portfolio of assets to pursue the development of our core tissue, packaging and recovery operations. This is why the net proceeds will be used to reduce debt. Our improved balance sheet combined with the recent refinancing of our credit facility will allow us to position our asset base amongst the best in the industry in terms of productivity and profitability.”
The transaction is expected to close before the end of April 2011, subject to the satisfaction of customary conditions and regulatory approvals.
“Cascades and Reynolds Group have made every effort to ensure the transfer of ownership will be seamless for the customers of Dopaco” adds Lemaire.
For further details on the transaction, please refer to the investor presentation available at www.cascades.com/investors.
About Cascades
Founded in 1964, Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fibers. It employs close to 12,500 employees, who work in more than 100 units located in North America and Europe.
About Dopaco
Dopaco is a leading manufacturer of cups and folding cartons for the quick-service restaurant and food service industries. It operates six plants (two in Ontario and four in the United States) and converts some 165,000 tonnes of boxboard a year.
About Reynolds Group Holdings Limited
Reynolds Group is a leading global manufacturer and supplier of consumer food and beverage packaging and storage products.
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