Cascades Announces Acquisition of Orchids Paper Assets
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Cascadesa leader in the recovery and
manufacturing of packaging and tissue products, has won the auction to acquire
certain of the assets of Orchids Paper Products in proceedings before the United
States Bankruptcy Court for the District of Delaware. Cascades agreement in
such regard is subject to approval by the Bankruptcy Court at a hearing
scheduled for July 1 st . The transaction, which will be completed for a cash
consideration of US$207 million, will cover substantially all the company's
assets, including the Barnwell, South Carolina and Pryor, Oklahoma operations,
as well as certain equipment and various of Orchid's Paper commercial
arrangements with Fabrica de Papel San Francisco , S.A. de C.V., based in
Mexicali, Mexico , and certain affiliates thereof.
Orchid Paper's integrated plants have an
estimated parent roll capacity of up to 114,000 tons and an estimated
converting capacity of up to 114,500 tons. Additionally, Orchids Paper has an
agreement with Fabrica providing access for up to 20,000 tons of converted
products for the Western U.S. market. Orchids Paper has invested more than
US$240 million in its assets and strategic supply arrangement with Fabrica over
the past five years.
The acquisition will allow Cascades to
accelerate the modernization of its tissue asset base, reduce sub-contracting
and transportation costs, and increase its geographical footprint to better
serve its customers.
Cascades will provide additional information
following the Bankruptcy Court approval of the agreement and will not provide
any further public comments or interviews until that time.
