US-based KapStone Paper and Packaging has completed its previously announced acquisition of Longview Fibre Paper and Packaging in a deal worth $1.03bn.
KapStone president and chief operating officer Matt Kaplan said that Longview's second-quarter revenues of $228m and adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $49m yielded an adjusted EBITDA margin of 20.7%.
"Even more notable was that they achieved these results despite incurring $4.3 million of expense for their once-every-five-year planned mill maintenance outage performed in April," Kaplan added.
The acquisition will increase KapStone's exposure to the containerboard segment, and is also set to broaden its kraft paper line. Following the acquisition, KapStone will become a global producer of extensible multiwall paper, a grade which is growing at about 4% annually.
Adjusted EBITDA in the month of June exceeded $19m, benefitting from the partial implementation in the quarter of the $50 per tonne containerboard and associated box price increases.
Funding for the acquisition, originally announced in June, came from borrowings under the $1.675bn amended and restated senior secured credit facility led by Bank of America, Barclays Bank, and Well Fargo Bank.
Longview employs around 1,800 people as a manufacturer of lightweight multiwall paper, speciality kraft papers, and corrugated products.
Image: Acquisition of containerboard manufacturer Longview will increase KapStone's exposure to the segment. Photo: courtesy of Ohmega1982.