Packaging Corporation of America (NYSE:
PKG) and Boise (NYSE: BZ) today announced
that they have entered into a definitive
agreement under which PCA will acquire all of the
outstanding common shares of Boise for
$12.55 per share in cash, for an aggregate transaction value of $1.995 billion, inclusive of $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 EBITDA
(excluding special items) in the last twelve months ended June 30, 2013 (LTM).
The combined packaging business generated 75% of sales and 83% of EBITDA over
the period, with the remainder generated by Boise’s paper business.
PCA's
containerboard capacity will increase to 3.7 million tons from its current level
of 2.6 million tons (a 42% increase) including the announced expansion of paper
machine number 2 (D2) at Boise's DeRidder mill. PCA’s corrugated products
volume will increase by about 30% as a result of the acquisition, and PCA’s
market presence will expand into the Pacific Northwest.
Synergies
are estimated to generate pre-tax benefits of approximately $105 million and
are expected to be fully realized within three years of closing. The synergies
are projected to come from mill grade optimization, sales mix and cost
reductions, lower transportation costs, corrugated products optimization, and
SG&A cost reductions.
