Quebec based recycled packaging and tissue company Cascades has announced the acquisition of Oklahoma’s Orchids Paper Products Company.
Cascades is to pay a cash sum of US$207mn, financed by its credit facilities, to acquire Orchids’ operations in Barnwell, South Carolina and Pryor, Oklahoma. The deal also involves arrangements with Fabrica de Papel San Francisco of Mexicali, Mexico.
Cascades President and CEO, Mario Plourde, said: "This acquisition is very well aligned with our strategic plan and supports our efforts to position our tissue platform for long-term growth. The acquisition of these well-funded assets enables us to do so while simultaneously supporting market consolidation and avoiding the risks inherent in the construction or installation of new equipment. We are focused on carrying out strategic investments in our key tissue sector that will modernize our assets, lower our fixed cost base, optimize our geographic footprint, and improve our logistics network and requirements to support the growth of our customers and Cascades. We are very pleased that this acquisition is well equipped to do all these. I have confidence in our future in this sector which has been very beneficial and generated interesting margins for Cascades over the past 40+ years".
The deal is expected to close in August or September 2019, subject to the usual closing conditions. Cascades is listed on the TSX under the symbol “CAS”.
"This acquisition combined with the ongoing execution of our modernization plan are enhancing our ability to serve our customers, increasing the quality of the products we manufacture, and improving the profitability of the Tissue Group,” said Cascades Tissue Group President and COO Jean-David Tardi. “The Barnwell and Pryor sites have well-invested modern equipment and an experienced and seasoned workforce. Today's acquisition is another important step we are taking that will increase our competitive positioning and support the growth of our customers by providing them with quality, value-added service and products."