Kingsey Falls, Quebec-based Cascades has entered into an agreement for the sale of Dopaco, Exton, Pa., to New Zealand-based Reynolds Group Holdings for $400 million in cash. Dopaco is a cup and carton converting business for the quick- service restaurant industry.

Net proceeds from the transaction will be used mainly to pay down Cascades’ debt. In connection with the transaction, Cascades will continue to supply boxboard to Dopaco through a five-year supply agreement.

“While we have always considered our ownership in Dopaco to be a good investment, I am pleased to announce this trans- action, which unlocks significant value for our shareholders,” says Alain Lemaire, president and ceo of Cascades. “In fact, this divestiture is part of our overall strategy to gain more financial flexibility and streamline our portfolio of assets to pursue the development of our core tissue, packaging and recovery operations. This is why the net proceeds will be used to reduce debt.”

The transaction is expected to close before the end of April.

Bank of America Merrill Lynch is acting as financial advisor to Cascades, and K&L Gates is acting as its legal advisor.