Kingsey Falls, Quebec, Canada, 13 June 2011 – Cascades Inc. (TSX: CAS), a leader in the recovery of recyclable materials and the manufacturing of green packaging and tissue paper products, has entered into an agreement with OpenGate Capital, a private equity firm, for the sale of two of its U.S. boxboard facilities: the Versailles mill in Connecticut and the Hebron plant in Kentucky. The sale is expected to be completed on 23 June 2011. The terms of the transaction were not disclosed.
The Versailles mill manufactures coated recycled boxboard, and has an annual production capacity of 165,000 tons. The Hebron plant converts coated boxboard into approximately 20,000 tons of folding cartons annually.
Net proceeds from the transaction will be reinvested in the other Cascades boxboard facilities, to improve their operations, efficiency, and competitiveness. In particular, Cascades plans to purchase new printing presses and other equipment for certain of its remaining folding carton plants. The Canadian boxboard mills also will benefit from this transaction through future capital investments.
“The divestiture of the Versailles and Hebron facilities, following the sales of Dopaco and the Avot-Vallée mill announced earlier this year, is a further step in our overall strategy to gain more financial flexibility and streamline our portfolio of assets in order to better pursue the development of our core operations," said Alain Lemaire, president and chief executive officer of Cascades. "We intend to continue focusing our efforts and investments towards modernizing our packaging and tissue paper facilities to improve productivity and profitability.”
Founded in 1964, Cascades produces, converts, and markets packaging and tissue products that are composed mainly of recycled fibers. The company employs more than 11,000 employees, who work in more than 100 units in North America and Europe. Its management philosophy, its experience of over 45 years in recycling, and its continued efforts in research and development are strengths that enable Cascades to create new products for its customers. Cascades' shares trade on the Toronto Stock Exchange, under the ticker symbol CAS.