Acquisitions

Cascades ready to buy out the assets of Orchids Paper Products Company

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Cascades  has announced that it has signed a final agreement to take over the whole business of Orchids Paper Products Company following the approval by the Bankruptcy Court of the United States for the District of Delaware.

Cascades will be paying the equivalent of 207 million dollars, financed through the credit lines of the company. The assets which will be acquired include those of Barnwell, South Carolina and Pryor, Oklahoma, plus some activities including delivery and other trade agreements with Fabrica de Papel San Francisco, whose headquarters are in Mexicali, Mexico, as well as some of its affiliates. Cascades expects that this will generate an annual Ebitda amounting to about 45 million dollars starting in 2021.

Orchids Paper has an agreement with Fabrica which includes access to 20,000 tons of converted products for the western US market. Over the past five years more than 240 million dollars have been invested in modern manufacturing and processing plants and in this strategic partnership. This also includes, at the site in Pryor, the installation of a new machine for paper, two new processing lines, and the upgrading of two other conversion lines. At the site in Barnwell, a new machine for QRT Valmet paper has been installed in 2017.

This acquisition helps speed up the modernisation of the United States tissue platform for Cascades, at the same time strengthening the company’s geographic and operational positioning on the tissue retail segment in the south and west of the United States. The plants which have been acquired are more in line with the long-term model chosen by Cascades for its conversion equipment, reducing waste rates during conversion operations, as well as enhancing overall efficiency and productivity.