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Capital from U.S. sales will benefit Cascades’ Canadian plants

Packaging and tissue manufacturer Cascades Inc. says the capital from the sale of two U.S. boxboard facilities will be reinvested in the company’s other carton plants, including Canadian boxboard mills.

Packaging and tissue manufacturer Cascades Inc. says the capital from the sale of two U.S. boxboard facilities will be reinvested in the company’s other carton plants, including Canadian boxboard mills.

Cascades has entered into an agreement with OpenGate Capital, a private equity firm, for the sale of the Versailles mill located in Connecticut and the Hebron plant located in Kentucky. The sale is expected to be completed on June 23, 2011. The terms of the transaction were not disclosed.

The Versailles mill specializes in the manufacturing of coated recycled boxboard and 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 the years to come, according to a statement from Cascades. In particular, Cascades plans to purchase new printing presses and other equipments for certain of its remaining folding carton plants. The Canadian boxboard mills will also benefit from this transaction through future capital investments.

Alain Lemaire, president and CEO of Cascades, said: “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. We intend to continue focusing our efforts and investments towards modernizing our packaging and tissue paper facilities to improve productivity and profitability.”