Cascades Inc. , one of Canada's largest forestry products companies, says it will buy the tissue paper business of Atlantic Packaging Products Ltd. for $60-million.
The company says the deal will allow Cascades to raise its annual capacity of recycled tissue by 55,000 tonnes and expand converting capacity by close to 70,000 tonnes.
The tissue plants acquired are located close to Toronto and add 175 employees to the Cascades work force.
The deal is subject to approval from the Competition Bureau.
"This acquisition is in keeping with two of our main long term strategic objectives: continued growth of our tissue business and consolidation of our leadership position in the development of environmentally responsible products," Alain Lemaire, president and CEO of Cascades, said in a release.
"The tissue sector has proven itself to be recession resistant showing steady growth thru the economic cycles and we believe business perspectives for this sector will continue to be advantageous for us going forward, particularly in the area of recycled products where Atlantic brings us added expertise."
Suzanne Blanchet, president and CEO of Cascades' tissue division, said the acquisition will better position the company in the key Ontario market.
"Moreover, the addition of these assets to our existing business offers interesting opportunities for synergies in terms of logistics and production efficiencies."
Cascades, with 13,000 employees, converts and sells packaging and tissues composed mainly of recycled fibres. The Montreal company has more than 100 plants in North America and Europe and also owns Norampac, Canada's largest maker of cardboard.