Graphic Packaging to buy Cascades' Norampac paperboard assets

GRAPHIC Packaging International Inc., a wholly owned subsidiary of major global food, beverage, and consumer product packaging solutions, Graphic Packaging Holding Company, will acquire several folding carton converting and paperboard mill assets from Cascades' Norampac Division in Canada.

The acquisition, which is expected to close by the first quarter of 2015, will be valued at approximately $39 million based on trailing 12-month sales of about $215 million and adjusted EBITDA of about $5 million. It will be funded with existing cash and borrowings from Graphic Packaging's revolving line of credit and will be subject to standard closing requirements and regulatory review.

The agreement will bring about significant synergies in the next 24 months. Norampac has three folding carton converting facilities located in Cobourg, Ontario, Mississauga, Ontario and Winnipeg, Manitoba. It also operates a Solid Bleached Sulfate (SBS) substitute mill in Jonquiere, Quebec and a Coated Recycled Board (CRB) mill in East Angus, Quebec. 

Graphic Packaging chairman, president, and chief executive officer David Scheible said the acquisition will boost the company’s position in the North American folding cartons market. It will also enable the firm to expand to Canada.