Cascades Inc. has reached an agreement to sell its Flexible Packaging plant activities to Houston, TX-based Five Star Holding in a $31 million transaction that became effective immediately. The Canadian packaging company will retain ownership of the site's real estate.
Located in Mississauga, ON, the flexible packaging facility represents Cascades' only plant that manufactures printed flexible plastic packaging and films. According to the company, the divestiture reflects its commitment to continuously advance its operations, commercial approach, and business model to deliver maximum value to customers.
The company identified Five Star as a buyer with both the expertise, and broader asset network necessary to realize the plant's growth potential in the flexible packaging market.
Employee retention and transition
The flexible packaging operations employ 45 people, all of whom will be retained by Five Star at closing. Cascades plans to work closely with Five Star to ensure a smooth ownership transition for employees, customers, and suppliers.
The transaction includes a supply agreement between both parties to ensure continued production and supply of flexible film used by Cascades' Tissue and Packaging sectors.
"Today's decision will allow us to reduce our debt and support the optimization of our operational platform to grow our strategic sectors," Hugues Simon, president and CEO of Cascades, said in a statement. "We are pleased to have found in Five Star a buyer committed to maintaining and developing the plant's activities."
Simon expressed gratitude to the facility's workforce:
"We wish to thank our colleagues at Cascades Flexible Packaging for their contribution and look forward to continuing our collaboration with them as one of their customers," he said.
Five Star's North American expansion
Alex Huis in 'T Veld, CEO of Five Star, emphasized the cultural alignment between the organizations.
"We look forward to welcoming the team at Cascades Flexible Packaging to the Five Star family," he said in a statement. "There was an immediate connection between our teams around manufacturing culture and shared focus on quality and safety."
The acquisition will accelerate Five Star's growth in sustainability-focused packaging for consumer, food, and beverage markets in Canada and throughout North America.
Founded in 1964, Cascades offers sustainable, innovative, and value-added packaging, hygiene, and recovery solutions. The company employs approximately 9,500 people across a network of 65 operating facilities in North America.