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Packaging Corporation of America to acquire Boise for $1.9bn

Packaging Corporation of America (PCA) has signed an agreement to acquire Boise, a manufacturer of packaging and paper products in the US, for about $1.9bn.

The acquisition will allow PCA to increase its containerboard capacity to about 3.7 million tons (mt) from its existing level of 2.6mt and corrugated products volume by around 30%.

PCA executive chairman Paul Stecko said the acquisition provides the containerboard that the company requires to support its corrugated products growth.

"The combined company is expected to generate strong financial results and strong cash flow which will be used to pay down debt as well as to continue to return value to our shareholders," Stecko added.

According to PCA, the combined companies generated $5.5bn in sales and $879m in EBITDA in the last twelve months ended 30 June 2013.

The transaction, which is expected to be completed in the fourth quarter of 2014, is subject to certain customary conditions and regulatory approvals.