Jun 11, 2013. /Lesprom Network/. KapStone Paper and Packaging Corporation and Longview Fibre Paper and Packaging, Inc. have signed an agreement for KapStone to acquire the stock of Longview Fibre Paper and Packaging, Inc. from Brookfield Capital Partners II, a private equity fund managed by Brookfield Asset Management Inc. in a cash free, debt free transaction for $1.025 billion in cash and subject to certain post-closing adjustments. Closing of the acquisition is subject to a number of customary conditions, including regulatory review, as the company said in a press release received by Lesprom Network.

Chairman and CEO of KapStone, Roger W. Stone, stated, "Acquiring Longview is an outstanding opportunity for numerous reasons. The acquisition immediately adds value for our shareholders by increasing earnings and generating very strong free cash flow. The deal is accretive to our bottom-line from Day 1. Our balance sheet, which was strong going into this transaction, remains strong after the acquisition. The combined company is expected to deliver substantial free cash flow in the first year allowing KapStone to quickly de-lever."

"This acquisition will increase our exposure to the highly desirable containerboard segment. It also broadens our Kraft paper line and makes KapStone a global producer of high performance extensible multiwall paper, a grade which is growing at about 4% per year."

Matt Kaplan, President and Chief Operating Officer of KapStone, added, "We look forward to having the Longview team join KapStone. Their track record is very impressive and over the past several years, Longview has increased productivity, benefitted from increased demand for containerboard and extensible Kraft paper, and experienced declining wood costs. We anticipate synergies of approximately $10 million within the first 18 months."

KapStone has committed financing from Bank of America, Barclays Bank, and Wells Fargo Bank.

The transaction is expected to close in the summer of 2013.

Longview is a leading manufacturer of high quality containerboard, lightweight high performance multiwall paper, specialty kraft papers, and corrugated containers located in the Pacific Northwest region. Longview's operations include a mill located in Longview, WA equipped with five paper machines which produce 1.15 million tons of containerboard and kraft paper annually.

KapStone Paper and Packaging Corporation is a leading North American producer of unbleached kraft paper and corrugated products. The Company is the parent company of KapStone Kraft Paper Corporation and KapStone Container Corporation which includes three paper mills and 15 converting plants across the Eastern and Midwestern US.