Corrugated packaging firm WestRock has secured approval from the US Department of Justice for the acquisition of KapStone Paper and Packaging.
Headquartered in Northbrook, Illinois, KapStone was established in 2015. The company manufactures containerboard, unbleached kraft paper and corrugated products, and provides packaging and logistics solutions.
The clearance from the federal executive department of the US government was the last antitrust approval required to complete the pending acquisition, which is expected to close on 2 November 2018, subject to customary closing conditions.
WestRock will carry out the acquisition via its subsidiary Whiskey Holdco.
Holdco will be the overall parent of WestRock and KapStone and their respective subsidiaries.
If the deal closes as expected, KapStone shareholders have the right to take $35 per share in cash, or 0.4981 shares of Holdco common stock and cash in lieu of fractional shares.
KapStone operates four paper mills, 22 converting plants, and over 60 distribution centers situated in North America. The business employs about 6,400 people.
The company also owns Victory Packaging, a packaging solutions distribution firm with facilities in the US, Canada and Mexico.
When the deal was signed in January 2018, WestRock said the acquisition will strengthen its presence on the West Coast and broadens its differentiated paper and packaging solutions portfolio with the addition of attractive paper grades and distribution capabilities.
The acquisition will also increase mix of virgin fiber based paper in WestRock’s paper portfolio.
Based on KapStone’s annualized EBITDA performance in the second half of its fiscal 2017, WestRock estimates the EV/EBITDA multiples to be under 10 times before and seven times following the full run rate of anticipated cost synergies and performance enhancements.
WestRock’s 45,000 team members support customers across the world from over 300 operating and business locations spanning North America, South America, Europe, Asia and Australia.
In August this year, WestRock has entered into an agreement to acquire Schlüter Print Pharma Packaging, a German-based supplier of a full range of leaflets and booklets.
Schlüter will become part of WestRock’s Multi Packaging Solutions business.