- By Anastaciah Ondieki The Atlanta Journal-Constitution
Georgia Paper manufacturer WestRock Company announced Monday that it had acquired KapStone Paper and Packaging Corporation of Illinois for a total enterprise value of $4.9 billion.
In a joint statement, the two companies said WestRock would assume $1.36 billion in KapStone’s net debt as part of the deal. That debt will be refinanced as part of the closing transaction, expected to take place in September.
Steve Voorhees, the CEO for WestRock said the deal would help expand his company’s operations to the West Coast and incorporate KapStone’s new paper products into WestRock’s portfolio.
With the expansion and new resources ,WestRock estimates the company will generate $200 million in profits by 2021.
“We look forward to welcoming the KapStone team members to WestRock and working with them to help make WestRock an even better company,” said Voorhees.
WestRock employs 45,000 people in five continents.
KapStone’s CEO Matt Kaplan said the agreement allows KapStone stockholders to receive either WestRock shares or $35 in cash per KapStone share.
“The transaction enables us to deliver an immediate and compelling cash premium to our shareholders,” said Kaplan.
KapStone, headquartered in Northbrook, is a leading producer and manufacturer specialty paper, corrugated products and container board. It employs 6,200 people in its 91 locations in North America. The company also owns Victory Packaging, which operates in the U.S., Canada and Mexico.
WestRock would not say how the deal might affect employees.
“Until we close the deal in September, it’s business as usual for both companies,” said Director of Corporate Communications John Pensec.
The acquisition is contingent upon approval by KapStone’s stockholders.