KapStone Paper and Packaging Corp. agreed to buy Longview Fibre Paper and Packaging Inc., a maker of paper used for shipping containers, from a fund managed by Brookfield Asset Management Inc. for $1.03 billion in cash.
The transaction will add to KapStone’s profitability immediately, the Northbrook, Illinois-based company said in a statement today. KapStone has committed financing from Bank of America Corp., Barclays Plc and Wells Fargo & Co. for the deal, which is expected to close this summer.
“This acquisition will increase our exposure to the highly desirable containerboard segment,” KapStone Chief Executive Officer Roger Stone said in the statement. “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 percent per year.”
Longview, which operates a mill in Longview, Washington, generated $831 million in net sales and $118 million of earnings before interest, taxes, depreciation and amortization last year, according to the statement. In the first quarter of this year, Longview’s net sales were $217 million, generating $42 million of Ebitda, KapStone said in the statement.
KapStone rose 18 percent to $35.04 at the close in New York, the biggest gain since March 2009.