Cascades has acquired assets, all located in the US, which will allow the company to double its production capacity of ecological packaging manufactured in moulded pulp.
The total cost of the transaction amounts to $37.4m.
The acquired manufacturing plants are Urban Forest Products and Clarion Packaging respectively located in Brook, Indiana and Clarion, Iowa; two of the top three egg-producing states in the U.S.
The plants manufacture moulded pulp protective packaging that primarily serves the egg and quick service restaurant industries and have a combined workforce of just over 150 employees.
Cascades also acquired a majority interest in Falcon Packaging, a leader in the distribution of egg packaging which has 31 employees in Ohio, Iowa and Georgia. Combined, these three companies have consolidated sales that exceed US$110M annually.
Cascades president and CEO Mario Plourde said: “These acquisitions give us the opportunity to improve Cascades’ position in the strategic fresh protein and food services packaging markets. They are also in line with our objective to expand our moulded pulp activities, which produce a recycled, recyclable, compostable and biodegradable packaging product that offers highly interesting opportunities against a backdrop of expanding interest in the circular economy. The value of this transaction is in line with current Cascades trading multiple and will be accretive to net earnings.”
Cascades Specialty Products Group president and COO Luc Langevin said: “The quality of the acquired assets and their complementary geographical positioning with our existing plants that manufacture moulded pulp packaging will allow us to improve the service we provide to our customers, and support our innovation initiatives.
“With four moulded pulp plants efficiently spread out across North America, Cascades will build synergy, improve the distribution of production volumes, and allow certain sites to specialize. By doubling our production of moulded pulp packaging, today’s announcement underlines our commitment to continue growing our presence in the green packaging market.”
Source: Company Press Release.