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.