Canada-based Cascades has agreed to sell its corrugated packaging facility in Richmond, British Columbia, to Crown Paper Group in a transaction valued at C$65.5m ($48.4m).
The sale forms part of Cascades’ plan to streamline its asset base and bring down its debt levels.
The deal covers the plant’s real estate and includes customary working capital adjustments, as well as the transfer of certain liabilities to the buyer.
Cascades president and CEO Hugues Simon said: “Cascades is committed to improving profitability and optimising its operational platform by allocating capital to its core markets.
“This transaction with Crown Paper Group supports the achievement of Cascades’ strategic objectives while preserving the prospects of the Richmond plant.
“It allows us to monetise valuable real estate assets while not impacting materially the cash flow profile of our packaging sector.”
In its statement, the company noted that “given its geographic position, the Richmond plant offered limited integration and synergy potential within Cascades’ operational network, but aligns with Crown’s current footprint, expanding its operations in the region”.
According to Cascades, Crown is viewed as a “natural long-term fit” for the Richmond operation, as the buyer already has activities in the province.
Cascades also said it will work “closely” with Crown to support an “orderly transition with customers, employees, and suppliers”.
Crown Paper Group CEO Rob Kreizenbeck said: “Acquiring the Richmond Box Plant is an important milestone in Crown’s continued expansion, furthering the integration of our mill and box operations to provide our customers with exceptional service and product offerings.
“We are excited to welcome the Richmond team to Crown very soon and look forward to building on the plant’s strong legacy of service and craftsmanship.”
Completion of the transaction is anticipated in the coming days, subject to standard closing conditions and final adjustments.
