Cascades to sell Dopaco to Reynolds Group for US$400 million in Cash
Monday, March 14, 2011
Press release from the issuing company
Kingsey Falls, QC, - Cascades Inc., a leader in the recovery of recyclable materials and the manufacturing of green packaging and tissue paper products, announces that it has entered into an agreement for the sale of Dopaco Inc., its converting business for the quick-service restaurant industry, to Reynolds Group Holdings Limited for a cash consideration of US$400 million.
Net proceeds from the transaction will mainly be used to pay down Cascades' debt. In connection with the transaction, Cascades will continue to supply boxboard to Dopaco, through a five year supply agreement.
Alain Lemaire, President and Chief Executive Officer of Cascades, said "While we have always considered our ownership in Dopaco to be a good investment, I am pleased to announce this transaction which unlocks significant value for our shareholders. In fact, this divestiture is part of our overall strategy to gain more financial flexibility and streamline our portfolio of assets to pursue the development of our core tissue, packaging and recovery operations. This is why the net proceeds will be used to reduce debt. Our improved balance sheet combined with the recent refinancing of our credit facility will allow us to position our asset base amongst the best in the industry in terms of productivity and profitability."
The transaction is expected to close before the end of April 2011, subject to the satisfaction of customary conditions and regulatory approvals. "Cascades and Reynolds Group have made every effort to ensure the transfer of ownership will be seamless for the customers of Dopaco" added Alain Lemaire, President and Chief Executive Officer of Cascades.
Bank of America Merrill Lynch is acting as financial advisor to Cascades, and K&L Gates is acting as the legal advisor to Cascades.
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