Victory Packaging

KapStone Paper and Packaging has agreed to acquire packaging distributor Victory Packaging in a $615m deal.

Both the companies have signed an agreement to this effect.

The acquisition is subject to a number of customary conditions, including regulatory review and it is expected to be completed in the second quarter this year.

Headquartered in Texas, Victory Packaging distributes all types of packaging through its 65 distribution centres located in the US, Mexico and Canada. It generated $953m in net sales and $55m in adjusted EBITDA for the year ended 31 December 2014.

Victory currently buys approximately 370,000t of corrugated products annually, of which, KapStone expects to supply an incremental 115,000t, upon completion of the acquisition.

However, Victory will still rely heavily on its current supplier base to fill the remainder.

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"Acquiring Victory will provide KapStone with growth based on Victory’s impressive, profitable track record."

KapStone Paper and Packaging chairman and CEO Roger W. Stone said: "Acquiring Victory will provide KapStone with growth based on Victory’s impressive, profitable track record.

"The acquisition will allow KapStone to de-risk operations by providing a higher level of integration. Victory is a unique strategic fit that will simultaneously increases utilisation of our converting assets and mills."

Victory Packaging president Robert Egan said: "The integrated business models of KapStone and Victory Packaging allow both organizations to meet their expansion goals, add immediate value and provide an avenue for future growth."

With 4,600 employees, KapStone Paper and Packaging Corporation is said to be the fifth largest producer of containerboard and corrugated packaging products and is the largest kraft paper producer in the US.

The company is the parent company of KapStone Kraft Paper Corporation and KapStone Container Corporation, which includes four paper mills and 22 converting plants, respectively, across the US.

Image: KapStone Paper and Packaging Corporation produces containerboard and corrugated packaging products. Photo: courtesy of digitalart via freedigitalphotos.