Packaging Corporation to buy Boise at 23% premium


Packaging Corporation of America (PKG) agrees to acquire Boise (BZ) for $12.55 per share in cash, or nearly $2B. The sale is expected to close in Q4, subject to certain customary conditions and regulatory approval.

PCA's containerboard capacity will increase to 3.7M tons from the current 2.6M and PCA will now have a market presence in the Pacific Northwest.

Synergies are expected to generate pre-tax benefits of $105M, to be fully realized within 3 years of the closing, according to PCA management.

Boise shareholders are getting 5x LTM EBITDA for their stock.

BZ closed at $9.96 Friday evening, making the purchase price a 26% premium.

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