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PCA Moves to Purchase Boise for $2 Billion

September 16, 2013
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Packaging Corporation of America (PCA) entered an agreement to acquire all outstanding common shares of Boise Inc. for an aggregate transaction value of US$1.995 billion. The move will increase PCA’s containerboard capacity by 42 percent.

The $2 billion transaction (all dollar figures are in U.S. currency) includes PCA taking on $714 million of Boise’s outstanding debt. The deal is expected to close in PCA’s fourth quarter of 2013, subject to regulatory approvals.

The combined companies generated $5.5 billion in sales and $879 million in EBITDA (excluding special items) in the last 12 months ended June 30, 2013. The combined packaging business generated 75 percent of sales and 83 percent of EBITDA over the period, with the remainder generated by Boise's paper business.

PCA's containerboard capacity will increase to 3.7 million tons from its current level of 2.6 million tons (a 42 percent increase), including the announced expansion of paper machine number 2 (D2) at Boise's DeRidder mill. PCA's corrugated products volume will increase by about 30 percent as a result of the acquisition. The move will also increase PCA's market presence into the Pacific Northwest.

“The acquisition is an excellent fit, both geographically and strategically, with unique and substantial synergies,” said Paul Stecko, Executive Chairman of PCA. “It provides the containerboard that PCA needs to support our strong corrugated products growth. The DeRidder containerboard mill is low cost, located in a very good wood basket and, after the D2 machine conversion, provides almost one million tons of primarily lightweight containerboard.”

PCA, headquartered in Lake Forest, Illinois, is the fourth largest producer of containerboard and corrugated packaging products in the United States with sales of $2.8 billion in 2012. PCA operates four paper mills and 71 corrugated product plants in 26 states across the country.


The boards of directors of both Boise and PCA have unanimously approved the agreement. Boise's board of directors expects to recommend that shareholders tender their shares into the offer once it is launched. The tender offer is required to be commenced within 10 calendar days and to remain open for at least 20 business days after launch. Any shares not tendered in the offer will be acquired in a second step merger at the same cash price as in the tender offer.

Boise Inc., headquartered in Boise, Idaho, manufactures a variety of packaging and paper products. Boise’s range of packaging products includes linerboard and corrugating medium, corrugated containers and sheets, and protective packaging products. Boise’s paper products include imaging papers for the office and home, printing and converting papers, and papers used in packaging, such as label and release papers.

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