KINGSEY FALLS, Ontario (News release) -- Cascades has won the auction to acquire certain of the assets of Orchids Paper Products in proceedings before the United States Bankruptcy Court for the District of Delaware. Cascades agreement in such regard is subject to approval by the Bankruptcy Court at a hearing scheduled for July 1st. The transaction, which will be completed for a cash consideration of US$207 million, will cover substantially all the company's assets, including the Barnwell , South Carolina and Pryor, Oklahoma operations, as well as certain equipment and various of Orchid's Paper commercial arrangements with Fabrica de Papel San Francisco , S.A. de C.V., based in Mexicali, Mexico , and certain affiliates thereof.
Orchid Paper's integrated plants have an estimated parent roll capacity of up to 114,000 tons and an estimated converting capacity of up to 114,500 tons. Additionally, Orchids Paper has an agreement with Fabrica providing access for up to 20,000 tons of converted products for the Western U.S. market. Orchids Paper has invested more than US$240 million in its assets and strategic supply arrangement with Fabrica over the past five years.
The acquisition will allow Cascades to accelerate the modernization of its tissue asset base, reduce sub-contracting and transportation costs, and increase its geographical footprint to better serve its customers.
Cascades will provide additional information following the Bankruptcy Court approval of the agreement and will not provide any further public comments or interviews until that time.
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