OpenGate Capital said it has agreed to buy two subsidiaries of Cascades. Financial terms weren’t announced. The deal includes Cascades Boxboard Group – Connecticut LLC, a paper mill facility located in Versailles, Conn., and Cascades Boxboard US Inc., a converting facility located in Hebron, Kentucky. The businesses generate a combined $100 million in revenue, a statement said. Los Angeles-based OpenGate is a PE firm.
OpenGate Capital, a global private equity firm, has signed a definitive agreement to acquire two subsidiaries of Cascades, Inc. (Toronto Stock Exchange: CAS) that manufacture boxboard, a thin, rigid board of 100% recycled fibers used to make cartons or boxes for cereal, frozen food, and other consumer products. These US-based acquisitions are in addition to OpenGate Capital’s recent European wood and paper industry acquisitions of Norampac Avot-Vallée, also from Cascades, and Kotkamills from Stora-Enso.
The businesses, Cascades Boxboard Group – Connecticut LLC, a paper mill facility located in Versailles, CT, and Cascades Boxboard US, Inc., a converting facility located in Hebron, KY, generated combined revenues in excess of $100 million in 2010. There are approximately 230 employees in the combined facilities.
“These are classic, well-run manufacturing subsidiaries that have the untapped potential to be even better,” said Andrew Nikou, OpenGate Capital Founder and Managing Partner. “Our industry expertise in wood and paper products will allow us to work with management and take an active role in the tactical direction of these companies. OpenGate’s specialized knowledge of the industry enabled us to quickly recognize what gems these subsidiaries are. In addition, the companies’ eco-friendly production of boxboard is appealing and in line with our firm’s sustainability philosophy.”
With a steadfast reputation for quality and consistency, the businesses have a wide client base of consumer products companies. The plants’ modern equipment, talented management team and skilled base of employees made them attractive investment opportunities. OpenGate Capital will operate the subsidiaries as one OpenGate Capital portfolio company.
Los Angeles-based Michael Kraus led the transaction for OpenGate Capital. Kraus and his colleagues will collaborate with the facilities’ existing management to enhance the solid operational and financial fundamentals existing in the businesses, along with accelerating new business growth and product innovation.
“OpenGate astutely pinpointed our innovative paperboards that enable customers to revolutionize their packaging offerings as one of several products with exceptional growth potential,” said Tony Difford, general manager at the Hebron facility. “We look forward to gaining the new perspective of the seasoned OpenGate operational experts to refine our operations and propel our growth,” he concluded.
Ghislain Levesque, general manager at the Versailles facility, added, “We are eager to begin working with OpenGate on a variety of company initiatives to fuel our expansion. Our wide variety of ecological paperboards with excellent printability and dependable quality offer a multitude of uses and promise for additional applications. Our team welcomes OpenGate as a great partner to continuously elevate our commitment to excellence in serving our clients and innovating.”
Nikou concluded: “We are very pleased with OpenGate’s progress in cultivating and nurturing our portfolio of high-quality businesses such as these. This significant transaction builds on OpenGate’s momentum, reinforcing our position as a growing global force in the private equity arena.”
About OpenGate Capital
OpenGate Capital is a global private equity firm focused on acquiring controlling interests in businesses with solid fundamentals that exhibit opportunities for operational improvements and growth. Established in 2005, OpenGate Capital has a global footprint with headquarters in Los Angeles, California and a principal office in Paris, France. OpenGate is served by a seasoned team of M&A and operating professionals who bring the skills needed to acquire, operate, and build successful companies. The partners of OpenGate have executed more than 100 transactions worldwide ranging from corporate divestitures, turnaround acquisitions, industry consolidations and other special situations investments across a wide array of industries and geographic markets. For more information about OpenGate Capital, please visit www.opengatecapital.com.
Founded in 1964, Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fibres. The Company employs more than 11,000 employees, who work in more than 100 units located in North America and Europe. Its management philosophy, its experience of over 45 years in recycling and its continued efforts in research and development are strengths that enable Cascades to create new products for its customers. Visit www.cascades.com for additional information.