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SEPTEMBER 2008
Temple-Inland acquires Caraustar’s interest in Indiana
boxboard mill
Temple-Inland, Inc. has acquired the remaining fifty
percent interest in Premier Boxboard Limited LLC (PBL)
from Caraustar Industries, Inc. PBL was a joint venture
between Temple-Inland and Caraustar. The purchase price
for Caraustar’s interest was $62 million in cash and
assumption of $25 million of debt associated with the
purchased interest.
PBL produces lightweight gypsum facing paper and containerboard
at a 308,000 tons-per-year mill in Newport, Indiana.
Temple-Inland will continue to produce lightweight gypsum
facing paper and containerboard at the mill. The lightweight
gypsum facing paper will serve the needs of both Temple-Inland’s
building products operations and external customers.
Containerboard produced at the mill will be primarily
used by Temple-Inland’s operations.
Caraustar has been the managing partner of PBL since
its formation in 1999. Temple-Inland terminated the marketing
and management agreements by and between PBL and Caraustar.
Marketing and management fees paid by PBL to Caraustar
under these agreements have been approximately $4 million
annually.
In addition to eliminating the marketing and management
fees paid to Caraustar, Temple-Inland expects to realize
synergies of approximately $10 million from reducing
cost, improving productivity and optimizing the mix of
product as the mill is fully integrated into the Temple-Inland
mill system.
Temple-Inland will fund the cash portion of the purchase
price through borrowings under its existing credit facilities.
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