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Packaging Corp. to acquire Sacramento Container Corp, assets for $265m

Staff Writer |
Packaging Corporation of America announced that it has entered into a definitive agreement to acquire substantially all of the assets of Sacramento Container Corporation, and 100% of the membership interests of Northern Sheets and Central California Sheets in a cash-free, debt-free transaction for a cash purchase price of $265 million.

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. â– 

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