Cascades to complete purchase of Papersource
By Canadian Packaging StaffConverting acquisition Cascades Cascades Tissue Group Papersource Converting Mill
Packaging and tissue converter to purchase remaining 50 per cent of shares for $85 million.
Cascades Inc., a producer, converter and marketer of packaging and tissue products headquartered in Kingsey Falls, Que., has announced it will purchase the remaining 50 per cent of shares it does not already own of Papersource Converting Mill Corp., a tissue paper converting plant located in Granby, Que.
Suzanne Blanchet, president and chief executive officer of the Cascades Tissue Group says, “With sales of more than $130 million and a consumption of more than 90,000 tons per year, the acquisition of the remaining shares of Papersource will increase the level of integration of Cascades Tissue Group to more than 70 per cent and will thus strengthen its positioning in the Away-from-Home segment in Canada and in the United States.”
The cash purchase of the acquired shares is about $60 million with Cascades assuming a debt of approximately $25 million, for a corresponding enterprise value of $145 million.
The deal is expected to be finalized in September 2011, but is contingent on approval of the Competition Bureau.
The 100 per cent ownership of Papersource is expected to have a positive impact on Cascades’ net consolidated results.
“This announcement confirms the firm intention of Cascades to be a key player in the tissue paper sector in North America”, states Alain Lemaire, president and chief executive officer of Cascades Inc.
Papersource manufactures products for the Away-from-Home market. It employs more than 160 employees operating in 230,000-square-feet of space annually producing 90,000 tons of paper products and garnering $130 million in sales.
Cascades, founded in 1964, produces, converts and markets packaging and tissue products that are composed mainly of recycled fibers. It employs nearly 11,000 people in over 100 units across North America and Europe. For more information, visit www.cascades.com.