Sep 24, 2013
Packaging Corporation of America (PCA), the fourth-largest U.S. producer of corrugated shipping boxes, recently agreed to buy Boise (BZ) Inc. for about $1.27 billion in cash, a move that will add to PCA’s capacity in the Pacific Northwest and in Europe. PCA will pay $12.55 a share, 26 percent over Boise’s Sept. 13 closing price, in a deal that also includes $714 million of Boise’s debt (based on SEC filings, this sum would appear to be Boise’s entire long-term debt). The two companies say the purchase will be complete in the fourth quarter of this year.
PCA says the takeover will increase its container board production capacity by 42%, to 3.7 million tons a year. PCA also forecasts pretax savings of $105 million within three years of the deal’s completion from lower transportation costs, and various synergies, especially in the SG&A area.