Packaging Corporation of America (PCA) 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.
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.
Closing is subject to certain customary conditions and regulatory approval and is expected in the 4Q 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.
