Graphic Packaging International has agreed to acquire several folding carton converting and paperboard mill assets from Cascades' Norampac Division in Canada.
"The acquisition of Cascades' Norampac paperboard assets enhances our position in North American folding cartons and enables us to extend our customer reach in Canada," said David Scheible, Graphic Packaging's Chairman, President and Chief Executive Officer. "The transaction is a continuation of our acquisition strategy to grow integrated folding carton converting volumes in key geographies and end-markets. These assets will broaden our customer base and allow us to offer our current customers a wider range of products."
Under the terms of the transaction, the purchase price will be approximately $39 million based on trailing twelve month sales of approximately $215 million and adjusted EBITDA of approximately $5 million. Significant synergies are expected over the next 24 months. The transaction will be funded with existing cash and borrowings from Graphic Packaging's revolving line of credit.
The Cascades boxboard units affected by the transaction are:
- East Angus, Qué., a mill that manufactures recycled coated boxboard for the production of folding cartons. Founded in 1910, it was purchased by Cascades in 1983.
- Jonquière, Qué., a mill that manufactures three-ply coated boxboard from virgin or recycled fibre. Founded in 1963, it was acquired by Cascades in 1984.
- Winnipeg, Man., a plant that manufactures folding cartons. Founded in 1905, it was acquired by Cascades in 2001.
- Mississauga, Ont., a plant that manufactures high-quality graphic packaging. Founded in 1986, it was purchased by Cascades in 1992.
- Cobourg, Ont., a plant that manufactures high-quality flexographic boxboard containers. It was built by Cascades in 1993.
The acquisition is subject to standard closing requirements and regulatory review and is expected to close in the first quarter of 2015.
