Packaging Corp. (PKG) to Acquire Columbus Container for $100M
- Top 10 News for 10/24 - 10/28: AT&T (T), Time Warner Make it Official; Margins Hamper Apple's Q4; Mergers Aplenty
- Wall St. falls as FBI to review more Clinton emails
- Clinton email problem resurfaces as FBI announces review
- ExxonMobil (XOM) Tops Q3 EPS by 5c; CapEx Light of Views
- Baker Hughes (BHI), General Electric (GE) in Partnership Talks, Not Merger Talks
News and research before you hear about it on CNBC and others. Claim your 2-week free trial to StreetInsider Premium here.
Packaging Corporation of America (NYSE: PKG) today announced that it has entered into a definitive agreement to acquire substantially all of the assets of Columbus Container, Inc., an independent corrugated products producer, in a cash-free, debt-free transaction for a cash purchase price of $100 million. Under the terms of the agreement, PCA will acquire a full-line corrugated products facility located in Columbus, Indiana, five warehousing facilities and other related operations located in Indiana and Illinois. The transaction is structured as a purchase of assets resulting in a full step-up of the assets to fair market value.
Columbus Container, Inc. is a full-service provider of corrugated packaging products utilizing state-of-the-art technologies and design centers to provide customers a solution for nearly any packaging need.
As a result of the acquisition, PCA's containerboard integration level is expected to increase by over 30,000 tons and will allow for further optimization and enhancement of mill capacity. The value of the increased containerboard integration, the expected synergies and the tax benefit of the step-up of assets, plus Columbus Container’s LTM EBITDA, results in a purchase price multiple of approximately 3.3 times EBITDA. The acquisition will be accretive to earnings immediately.
PCA Chairman and CEO Mark Kowlzan said, “Following our acquisition of Timbar, this acquisition will further enhance our operations both geographically and strategically through additional integration and optimization of our warehousing and logistics capabilities.” PCA Executive Vice President, Tom Hassfurther, added “Like previous acquisitions, the addition of Columbus Container is a great strategic fit for PCA. They have in place an excellent management team that leads a highly skilled and dedicated group of employees and have earned an outstanding reputation in the marketplace.”
Closing is subject to certain customary conditions and regulatory approval and is expected in the fourth quarter of 2016. The company expects to finance the transaction with available cash on hand.
PCA is the fourth largest producer of containerboard and corrugated packaging products in the United States and the third largest producer of uncoated freesheet paper in North America. PCA operates eight mills and 95 corrugated products plants and related facilities.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- European Commission Opens Investigation into Proposed Acquisition of Syngenta (SYT) by ChemChina
- Stonemor Partners (STON) Set to Open Lower Following Distribution Cut
- Corrections Corporation of America Rebrands as CoreCivic
Create E-mail Alert Related CategoriesCorporate News, Management Comments, Mergers and Acquisitions
Related EntitiesEarnings, Definitive Agreement
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!