Cascades expands containerboard packaging assets
Kingsey Falls, QC-based Cascades Inc. has acquired four plants in Ontario to strengthen its position in the containerboard packaging sector, and purchased an ownership position in Tencorr Holdings Corp. It also increased its equity in the Greenpac Mill LLC for the second time in 2017.
The four plants, acquired from the Coyle family, make boxes and speciality products and offer strong growth potential, says Cascades. They are: McLeish Corr-a-Box Packaging & Design, Etobicoke; Brown Packaging, Burlington; Coyle Corrugated Containers Inc., Scarborough; Coyle Packaging (Peterborough) Ltd., Peterborough.
Cascades increases its production capacity by 500 million sq. ft./y and strengthens its customer service in the region. The plants already have procurement agreements with Greenpac so the transaction will have little effect on Cascades’ integration rate. Cascades also acquired the Coyle family’s 33% stake in Tencorr which makes sheet stock for box producers.
The additional interest in Containerboard Partners, one of Greenpac’s shareholders, increases Cascades’ holding from 62.5% to 66.1%. It has been consolidating the Greenpac results since April 2017.
The total cost of the transaction is $C49 million of which $21million is related to the increased stake in Greenpac and its new position in Tencorr. The containerboard packaging plants were acquired for $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.