Cascades announces that it has entered into an agreement with an affiliate of funds to sell its 57.6% equity interest in Reno De Medici S.p.A. for an all-cash price of €1.45 per share, corresponding to a total net cash consideration of approximately €315.3 million.
The selling price represents a 24% premium to RDM's 90-day volume weighted moving average share price, and a 6.9x multiple to RDM's last twelve months adjusted operating income before depreciation as of March 31, 2021. 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 centers across Europe and the USA.
The transaction is expected to be completed in the third quarter of 2021 and is subject to customary closing conditions, including required merger control approvals.
"The monetization of our RDM investment reflects our commitment to creating long-term value for the Company and our shareholders" stated Mario Plourde, President and Chief Executive Officer. "The timing of this divestiture allows Cascades to monetize the value generated by RDM's multi-year transformation initiatives, which have helped drive the significant increase in Reno de Medici's share price over the past year. 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. 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."
"Today's announcement signals the end of our Company's successful 35-year operating history in Europe. 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. 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," Mr. Plourde said in closing.