Staff
Packaging Corporation of America (PCA), a maker of containerboard and corrugated packaging products, and Boise announced early today that PCA will acquire Boise and all of the outstanding common shares for $1.9 billion.
That will include $714 million of outstanding indebtedness of Boise.
The transaction is expected to close in the fourth quarter of 2013 with committed debt financing, but is subject to certain customary conditions and regulatory approvals.
The combined companies generated $5.5 billion in sales and $879 million in earnings before interest and taxes and depreciation and amortization, excluding special items, in the last 12 months ended June 30.
PCA’s containerboard capacity would increase to 3.7 million tons from its current level of 2.6 million tons, inclusive of the announced expansion of paper machine No. 2 at Boise’s DeRidder mill.
PCA’s corrugated products volume would rise by nearly 30 percent as a result of the acquisition while PCA’s market presence would expand into the Pacific Northwest.
Synergies likely are to generate pre-tax benefits of roughly $105 million, and are expected to be fully realized within three years of closing.
