Rock-Tenn Company agrees to acquire Southern Container
Rock-Tenn Company announced that it has agreed to acquire
the stock of Southern Container Corp., a privately-held containerboard
manufacturing and corrugated packaging business, for $851 million in
Rock-Tenn expects that Southern Container will have
approximately $142 million in debt outstanding immediately after the
acquisition. Southern Container operates the 720,000 ton per year Solvay
mill, located near Syracuse, New York, one of the lowest cost recycled
containerboard mills in North America, as well as eight integrated corrugated
box plants, two sheet plants, and four high impact graphics facilities.
Consolidated net sales of the acquired business for the 52 week period
ended September 8, 2007 were $538 million.
All corporate approvals of the transaction have been
received. The closing is subject to Hart-Scott-Rodino review and other
customary closing conditions.
Rock-Tenn plans to finance the acquisition with proceeds
from $1.4 billion in new credit facilities and the sale of unsecured
senior notes. The $1.4 billion will provide the Company with funding
to complete the acquisition, refinance the Company’s existing credit
facilities and provide in excess of $200 million of undrawn capacity.