Westrock agrees to buy Kapstone
WestRock Co., Atlanta, GA, will acquire all the outstanding shares of KapStone Paper and Packaging Corp., Northbrook, IL, for $US35.00 per share and assume about $1.36 billion in net debt, for a total enterprise value of about $4.9 billion.
Founded in 2005, KapStone produces and distributes containerboard, corrugated products and specialty papers including liner and medium containerboard, kraft papers and saturating kraft.
KapStone also owns Victory Packaging, a packaging distribution company with facilities in the US, Canada and Mexico.
Integrating the two systems is expected to save about $200 million/y by the end of fiscal 2021. As well, the move strengthens WestRock’s presence on the West Coast and broadens its differentiated paper and packaging solutions portfolio with the addition of attractive paper grades and distribution capabilities. It also increases the mix of virgin fiber-based paper in WestRock’s paper portfolio. KapStone’s three million tons of paper uses 78% virgin fiber and 22% recovered fiber, increasing WestRock’s over-all mix of virgin fiber from 65% to 67%.
The transaction is subject to closing conditions and is expected to close during the quarter ending September 30, 2018. KapStone will be integrated into WestRock’s Corrugated Packaging segment.