Cascades is exiting its boxboard operations in Europe to focus on North America.
In a statement on Jul. 5, the company says it will sell its 57.6 per cent equity interest in Reno De Medici S.p.A. (RDM) for an all-cash price of €1.45 per share, for a total of approximately €315.3 million (CA$461 million), to Apollo Global Management.
Cascades had maintained operations in Europe for 35 years.
The selling price represents a 24 per cent premium to RDM’s 90-day volume weighted moving average share price, and a 6.9 times multiple to RDM’s last 12 months adjusted operating income before depreciation as of Mar. 31, 2021.
“Strategically, exiting our Boxboard Europe segment is aligned with our plan to focus on strengthening the competitive positioning of our core North American packaging and tissue papers business operations,” says Mario Plourde, president and chief executive officer of Cascades.
“To this end, proceeds from the divestiture will support ongoing strategic modernization initiatives and key projects and allow Cascades to strategically return capital to shareholders and proactively manage our debt profile.”
Upon closing of the recently announced acquisition of Eska Group, the RDM group operations will grow to nine mills and five specialized cutting and sheeting centres across Europe and the U.S.
“While Cascades is turning a page to focus on North America, we are confident that the team at Apollo will be an ideal strategic partner to support RDM’s future growth,” says Plourde.
“We would like to thank Michele Bianchi and the Reno management team as well as all of the employees for the successful and positive partnership we have enjoyed with them over these many years.”
The transaction is expected to be completed in the third quarter of 2021.
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