Packaging Corporation of America Closes on Key Acquisitions

SEATTLE (Scrap Monster): Packaging products manufacturer Packaging Corporation of America (PCA) has announced that it has completed the acquisition of assets of Sacramento Container Corp. and 100% of the membership interests in Northern Sheets, LLC and Central California Sheets, LLC. The all-cash $265 million purchase was fully funded from available cash on hand with the company. PCA had announced its decision to acquire substantially all of the assets of Sacramento Container and all of the membership interests in Northern Sheets and Central California Sheets during end-August this year.

As per the terms of the agreement announced earlier, PCA has acquired full-line corrugated products and sheet feeder operations of Sacramento Container in McClellan, California and Kingsburg, California. The purchase price was calculated based on fair market value. The acquisition is expected to generate significant synergies and tax-benefits.

PCA Chairman and CEO Mark Kowlzan welcomed all the new employees to the company and expressed the hope that the new operations will be integrated into PCA at the earliest. The acquisition of Sacramento Container, Northern Sheets and Central California Sheets are very much in line with the company’s strategic reorganization plan, Kowlzan added.

Tom Hassfurther, PCA Executive Vice President stated that the acquisition of the new facilities will further enhance its operations-both geographically and strategically. The dedicated and customer-oriented employees coupled with the strong management teams of the new companies will be an excellent fit with PCA’s culture. These companies have been in the forefront in providing quality service to wide range of customers across northern and central regions of California, Hassfurther said.

Earlier in November last year, PCA had announced completion of acquisition of Columbus, Indiana-based Columbus Container, Inc., an independent corrugated products producer in an all cash deal worth $100 million. Prior to that in August, it had acquired the assets of Timbar Corporation for $386 million, in accordance with the definitive agreement entered in July. All these acquisitions are expected to significantly increase PCA’s containerboard integration. Furthermore, the acquisitions are expected to enhance the company’s balance sheet, financial results and cash flow.

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. PCA operates eight mills and 95 corrugated products plants and related facilities.