By P&PC Staff
By P&PC Staff
Cascades has completed its previously announced acquisition of Orchids Paper Products assets for US $207 million.
The assets include the Barnwell, South Carolina and Pryor, Oklahoma operations, as well as other assets, including a partnership arrangement with Fabrica de Papel San Francisco, S.A. de C.V., based in Mexicali, Mexico.
“I am very pleased to welcome Pryor and Barnwell employees to the Cascades family,” says Mario Plourde, Cascades president and CEO.
“Without a doubt, this acquisition will accelerate the modernization of Cascades’ U.S. tissue platform while strengthening the geographic and operational positioning of the company’s retail tissue segment. This transaction creates value for both our clients and for our shareholders with an expected annual EBITDA contribution of approximately US$45 million beginning in 2021.”
Over the past five years, more than US$240 million has been invested in the plants’ modern production and converting equipment and in establishing a strategic partnership with Fabrica. Orchids Paper’s integrated plants have an estimated parent roll capacity of up to 114,000 tons and up to an estimated 114,500 tons of converting capacity.
The agreement with Fabrica provides access for up to an additional 20,000 tons of converted products for the Western U.S. market. In recent weeks, certain aspects of this agreement have been renegotiated to the satisfaction of both parties.
“Today’s announcement highlights our commitment to increase our ability to serve our customers and position Cascades, in the tissue paper segment, with a view to long-term growth,” says Jean-David Tardif, president and COO of Cascades Tissue Group, in a release. “Thanks to our strong order book, we can quickly take advantage of maximizing the utilization rate of the acquired facilities.”
CIBC Capital Markets acted as the exclusive financial advisor, and K&L Gates as legal counsel, to Cascades in the transaction.