Stockwatch -Cascades to focus on its packaging, tissue papers and recovery activities.
Stockwatch – Canadian paper company Cascades, Inc. (TSE:CAS, Mkt cap 607.24M, P/E 38.26, Div/yield 0.04/2.48, EPS 0.17, Shares 94.15M) has agreed to sell its fine paper business to a unit of US buyout firm HIG Capital LLC in a transaction that will allow it to focus on its packaging, tissue papers and recovery activities. The divestment is estimated to fetch proceeds of $39.5 million, Cascades said.
Under the terms of the deal, Cascades will transfer three units to HIG’s subsidiary Rolland Enterprises Inc. These include the Rolland Division, the company’s uncoated fine papers and security papers plant in Saint-Jérôme; the CTC Converting Center, a fine papers and distribution facility also located in Saint-Jérôme; as well as its de-inked bleached kraft pulp manufacturing plant, Fibres Breakey, in Sainte-Hélène-de-Breakeyville. The three units have a combined workforce of about 425.
Once the disposal is finalized, the units will restart operations under the Rolland Enterprises name. They will remain under the helm of their existing management team, which will ensure a smooth transfer of the business. Cascades will continue to work with the new owner for the procurement of waste paper after the sale closes.
The three units make a positive contribution to Cascades’ results but this sale will help the company trim its debt and concentrate on its core activities, commented president and chief executive Mario Plourde.
According to Cascades Specialty Products Group’s president and chief operating officer Luc Langevin, the transaction will allow the three business units to achieve their goals more quickly and ensure their development going forward.
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