| Cascades to Sell Dopaco to Reynolds Group |
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Kingsey Falls, Quebec, Canada, 11 March 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 to sell Dopaco Inc., its converting business for the quick-service restaurant industry, to Reynolds Group Holdings Limited for a cash consideration of USD 400 million.Net proceeds from the transaction will be used mainly to pay down Cascades' debt. In connection with the transaction, Cascades will continue to supply boxboard to Dopaco, through a five year supply agreement.“While we have always considered our ownership in Dopaco to be a good investment, I am pleased to announce this transaction, which unlocks significant value for our shareholders," said Alain Lemaire, president and chief executive officer of Cascades. "In fact, this divestiture is part of our overall strategy to gain more financial flexibility and streamline our portfolio of assets to pursue the development of our core tissue, packaging, and recovery operations. This is why the net proceeds will be used to reduce debt. Our improved balance sheet combined with the recent refinancing of our credit facility will allow us to position our asset base amongst the best in the industry in terms of productivity and profitability.” The transaction is expected to close before the end of April 2011, subject to the satisfaction of customary conditions and regulatory approvals. “Cascades and Reynolds Group have made every effort to ensure the transfer of ownership will be seamless for the customers of Dopaco,” Lemaire said.Bank of America Merrill Lynch is acting as financial advisor to Cascades, and K&L Gates is acting as the legal advisor to Cascades. For further details on the transaction, refer to the investor presentation available at www.cascades.com/investors.
Founded in 1964, Cascades produces, converts, and markets packaging and tissue products that are composed mainly of recycled fibers. The company employs close to 12,500 employees, who work in more than 100 units located in North America and Europe. Its management philosophy, its more than 45 years of experience 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.
Dopaco Inc. is a leading manufacturer of cups and folding cartons for the quick-service restaurant and food service industries. It operates six plants (two in Ontario and four in the United States) and converts some 165,000 metric tons of boxboard a year.
Reynolds Group is a leading global manufacturer and supplier of consumer food and beverage packaging and storage products.
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