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KapStone to acquire US containerboard manufacturer for $1.03bn

KapStone Paper and Packaging has entered into an agreement to acquire the stock of the US-based containerboard manufacturer Longview Fibre Paper and Packaging from Brookfield Capital Partners II for $1.03bn.

KapStone chairman and chief executive officer Roger Stone said the acquisition of Longview will increase the company’s exposure to the containerboard segment.

"It also broadens our Kraft paper line and makes KapStone a global producer of high performance extensible multiwall paper, a grade which is growing at about 4% per year," Stone said.

Following the transaction, KapStone expects synergies of about $10m within the first 18 months. The product lines of the companies complement each other and will provide the company with a national presence in corrugated containers.

Closing of the acquisition, which is expected to take place in the summer 2013, is subject to a number of customary conditions, including regulatory review.

Longview manufactures containerboard, lightweight multiwall paper, Kraft papers and corrugated containers.

The company’s operations include a mill located in Longview, Washington, US, equipped with five paper machines which produce 1.15 million tons of containerboard and Kraft paper a year.

In 2012, the company generated $831m in net sales and $118m of earnings before interest, taxes, depreciation and amortization (EBITDA). Its net sales in the first quarter of 2013 stood at $217m generating $42m of EBITDA.

Brookfield Capital Partners II is a private equity fund managed by Brookfield Asset Management.