Packaging Corp. to acquire Sacramento Container Corp, assets for $265m
The company has also announced that it will discontinue production of uncoated freesheet (UFS) and coated one-side (C1S) grades at its Wallula, Washington mill in the second quarter of 2018 to begin the conversion of its 200,000 ton-per-year No. 3 paper machine to a 400,000 ton-per-year high-performance 100% virgin kraft linerboard machine.
The acquisition transaction is structured as a purchase of assets resulting in a full step-up of the assets to fair market value.
Under the terms of the agreement, PCA will acquire full-line corrugated products and sheet feeder operations in McClellan, California and Kingsburg, California.
The value of the expected synergies, the tax benefit of the step-up of assets and the operations’ EBITDA result in a purchase price multiple of approximately five times EBITDA.
The acquisition will be accretive to earnings immediately. ■