Expansion projects

WestRock acquires smaller competitor KapStone

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The US packaging juggernauts Westrock has announced it has signed a final agreement for the acquisition of KapStone Paper and Packaging www.kapstonepaper.com for a total investment of 4.9 billion dollars. Westrock will buy all circulating shares of KapStone at 35 dollars each for a total net indebtedness of about 1.36 billion dollars.

The agreement, which requires the approval of KapStone’s shareholders to be finalized, is expected to be finalized next September and has been the biggest acquisition made by WestRock since the company was founded in 2015.

KapStone was established in 2005 and is based in Northbrook, Illinois. With about 6 thousand employees, it produces and markets containerboard, corrugated cardboard and special papers in its 86 plants and distribution centres. It owns Victory Packaging, with plants in the USA, Canada and Mexico, including a distribution centre in Chesapeake on the Eastern Coast of the United States.

«KapStone has the perfect size for our business», said WestRock President and CEO Steven C. Voorhees in a conference call with sector analysts. «Their corrugated packaging business will improve WestRock’s corrugated packaging in North America and enable us to offer complementary products. Furthermore, expanding our geographical presence will enable us to better serve our already existing customers». WestRock is a juggernaut with well 45 thousand employees. It confirmed that the agreement will consolidate its business activity on the Western Coast, help increase margins in the sector of corrugated packaging and add new products and services.

The second largest producer of corrugated packaging after International Paper Co., WestRock was established in 2015 from the merger of MeadWestvaco, with headquarters in Richmond, and the Georgia based Rock-Tenn.

Since then, the company has carried out several acquisitions to expand its geographical base and presence in the production of special packaging and corrugated packaging, which are largely used in shipping and consumer packaging.

Last year the company took over the New York based Multi Packaging Solutions International after signing an agreement worth 2.28 billion dollars, including debts. This added additional assets to WestRock’s portfolio of special packaging articles for consumer and health care products.

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