WestRock, an Atlanta-based corrugated packaging company with a kraft linerboard paper mill in Florence, will assume approximately $1.36 billion in net debt, bringing the total deal value to around $4.9 billion, the company said in a news release.
KapStone is an Illinois-based pulp and paper company with kraft manufacturing facilities in North and South Carolina, including Cherokee County and North Charleston, and a lumber mill in Summerville.
“KapStone is a great fit with WestRock,” WestRock CEO Steve Voorhees said. “Their complementary corrugated packaging and distribution operations will enhance WestRock’s ability to serve customers across our system, particularly in the western United States, and the addition of their specialty kraft paper products that we do not make enhances our differentiated portfolio of paper and packaging solutions.”
KapStone stockholders will have the option to receive $35 per share in cash or 0.4981 WestRock share per KapStone share, with elections of stock consideration capped at 25% of the outstanding KapStone shares.
KapStone also owns Victory Packaging, a packaging solutions distribution company with operations in the United States, Canada and Mexico. WestRock, which resulted from a 2015 merger between MWV and RockTenn, recently completed its acquisition of Plymouth Packaging.
Also Monday, WestRock announced $4.38 earnings per diluted share and 87 cents of adjusted earnings per diluted share for its fiscal first quarter, ended Dec. 31.
The company reported earnings of 32 cents per diluted share and 47 cents of adjusted earnings per diluted share in the same quarter in 2016.
“Our team executed well against our strategy and delivered a strong quarter to start our fiscal year,” Voorhees said. “The outlook for paper and packaging remains attractive, and we are well-positioned to achieve our financial goals for fiscal 2018 and beyond.”