Paper giant Cascades is acquiring four plants in Ontario to strengthen its position in the containerboard packaging market. It’s also purchased an ownership position in Tencorr Holdings and an increase in its equity holding of the Greenpac Mill. Founded in 1964, Cascades produces, converts and markets packaging and tissue products composed mainly of recycled fibres. “We’re very pleased to expand our presence in Ontario and increase our stake in Greenpac for the second time this year,” said Cascades President and CEO Mario Plourde. “These transactions align perfectly with our vision and strategy for our containerboard activities.” The four following plants were acquired and specialize in the manufacturing of boxes and specialty products:
- McLeish Corr-a-Box Packaging & Design in Etobicoke
- Brown Packaging in Burlington
- Coyle Corrugated Containers in Scarborough
- Coyle Packaging in Peterborough
The transaction, said Cascades, will expand its presence in Ontario, increase its production capacity by 500 million square feet per year, and strengthen its ability to serve customers in the region. The plants already have procurement agreements with Greenpac, so the acquisitions will have little impact on Cascades’ integration rate. Cascades also acquired the Coyle family’s 33% stake in Tencorr, a company specializing in manufacturing sheet stock for box producers, as well as an additional interest in Containerboard Partners, one of Greenpac’s shareholders – thus increasing its holdings in Greenpac to 66.1% from 62.5%. “These new assets will support our growth by providing us with increased capacity and flexibility,” said Charles Malo, President and COO of Cascades Containerboard Packaging. “This transaction will also enable us to better serve our customers as we’ll 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,” he added. 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 $28 million, including an assumed debt of $4 million.