Packaging Corporation of America Announces Agreement to Acquire Columbus Container, Inc.
October 11 2016 - 5:00PM
Business Wire
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.
Some of the statements in this press release are forward-looking
statements. Forward-looking statements include statements about
expected synergies or other benefits from the acquisition, the
timing of completion of the acquisition, our future earnings and
financial condition, our industry and our business strategy.
Statements that contain words such as “ will”, “should”,
“anticipate”, “believe”, “expect”, “intend”, “estimate”, “hope” or
similar expressions, are forward-looking statements. These
forward-looking statements are based on the current expectations of
PCA. Because forward-looking statements involve inherent risks and
uncertainties, the plans, actions and actual results of PCA could
differ materially. Among the factors that could cause plans,
actions and results to differ materially from PCA’s current
expectations include the following: the impact of general economic
conditions; conditions in the paper and packaging industries,
including competition, product demand and product pricing;
fluctuations in costs; the possibility of unplanned outages or
interruptions at our principal facilities; and legislative or
regulatory requirements, particularly concerning environmental and
tax matters, as well as those identified under Item 1A. Risk
Factors in PCA’s Annual Report on Form 10-K for the year ended
December 31, 2015 filed with the Securities and Exchange Commission
and available at the SEC’s website at “www.sec.gov”.
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version on businesswire.com: http://www.businesswire.com/news/home/20161011006699/en/
Packaging Corporation of AmericaBarbara SessionsINVESTOR
RELATIONS: (877) 454-2509PCA’s Website: www.packagingcorp.com
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