Sep 16, 2013

Posted by in Featured, Stock Market News | 0 Comments

Hot Movers: Packaging Corp. of America (NYSE:PKG) and Boise (NYSE:BZ)

Hot Movers: Packaging Corp. of America (NYSE:PKG) and Boise (NYSE:BZ)

Packaging Corp. of America (NYSE:PKG) is purchasing packaging specialist Boise (NYSE:BZ) in an agreement priced an nearly $1.3 billion, forcing shares of both firms higher in the premarket session on Monday.

Boise shares jumped up 26.71% to $12.62 on news of the agreement, which is predicted to end in the fourth quarter. Shares of PCA jumped up 11.9% to $61.04.

PCA would pay $12.55 a share in cash for Boise’s outstanding common shares. The total deal is worth $1.995 billion, although this consists of $714 million of outstanding Boise debt.

The combined firms generated $5.5 billion in sales and $879 million in EBITDA (omitting special items) in the past twelve months concluded on June 30, 2013 (LTM). The united packaging business generated 75% of sales and 83% of EBITDA over the period, with the rest generated by Boise’s paper business.

Boise Board Chair, Carl Albert, reported that their Board and management team have methodically assessed a broad range of strategic options for Boise, and we think this deal is the best way to make the most worth for our stockholders.

According to the terms of the definitive deal, an affiliate of PCA is needed to commence a tender offer to purchase all outstanding shares of Boise’s common stock for $12.55 per share in cash. The boards of directors of both Boise and PCA have generally accepted the deal.

Comments are closed.