07.11.16
Packaging Corporation of America announced that it has entered into a definitive agreement to acquire substantially all of the assets of TimBar Corporation, a large independent corrugated products producer, in a cash-free, debt-free transaction for a cash purchase price of $386 million.
Under the terms of the agreement, PCA will acquire five corrugated products plants, two fulfillment centers and four design centers located primarily in the eastern and southeastern US. The transaction is structured as a purchase of assets resulting in a full step-up of the assets to fair market value.
TimBar, with sales of $324 million in 2015, provides solutions to customers in the higher margin retail, industrial packaging and display and fulfillment markets with a focus on multi-color graphics and technical innovation.
As a result of the acquisition, PCA’s containerboard integration level is expected to increase by more than 200,000 tons or 6% from its current level of 87% and will allow for further optimization and enhancement of mill capacity.
“Following our successful integration of Boise, including the capacity we now have at the DeRidder, LA mill, this acquisition is an excellent fit, both geographically and strategically, with substantial benefits and synergies,” said Mark Kowlza, PCA chairman and CEO.
Closing is subject to certain customary conditions and regulatory approval and is expected in the third quarter of 2016. The company expects to finance the transaction with a new term loan.
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 90 corrugated products plants and related facilities.
Under the terms of the agreement, PCA will acquire five corrugated products plants, two fulfillment centers and four design centers located primarily in the eastern and southeastern US. The transaction is structured as a purchase of assets resulting in a full step-up of the assets to fair market value.
TimBar, with sales of $324 million in 2015, provides solutions to customers in the higher margin retail, industrial packaging and display and fulfillment markets with a focus on multi-color graphics and technical innovation.
As a result of the acquisition, PCA’s containerboard integration level is expected to increase by more than 200,000 tons or 6% from its current level of 87% and will allow for further optimization and enhancement of mill capacity.
“Following our successful integration of Boise, including the capacity we now have at the DeRidder, LA mill, this acquisition is an excellent fit, both geographically and strategically, with substantial benefits and synergies,” said Mark Kowlza, PCA chairman and CEO.
Closing is subject to certain customary conditions and regulatory approval and is expected in the third quarter of 2016. The company expects to finance the transaction with a new term loan.
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 90 corrugated products plants and related facilities.