This content was written and submitted by the supplier. It has only been modified to comply with this publication’s space and style.
The aggregate consideration, consisting of 50% cash and 50% RockTenn stock, is valued at $35 per-share of Smurfit-Stone common stock, and represents a 27% premium to Smurfit-Stone's closing stock price on January 21, 2011. The aggregate equity value of the transaction, based on the closing price of RockTenn's common stock on January 21, 2011, is approximately $3.5 billion.
This strategic transaction, unanimously approved by the Boards of Directors of both companies, will create a $9 billion leader in the North American paperboard packaging market. Upon closing, RockTenn will maintain its headquarters in Norcross, GA.
Smurfit-Stone is one of the industry's leading integrated containerboard and corrugated packaging producers and one of the world's largest paper recyclers. Smurfit-Stone has manufacturing mill capacity of 7.0 million tons, and when combined, RockTenn will have 9.4 million tons of total production capacity, including 7.5 million tons of mill production in the attractive containerboard market.
RockTenn's Chairman and Chief Executive Officer, James A. Rubright said, "RockTenn's acquisition of Smurfit-Stone is another major step in our transformation of RockTenn to be the most respected company in our business with a laser focus on exceeding our customers' expectations and creating long term shareholder value. The containerboard and corrugated packaging industry is a very good business and U.S. virgin containerboard is a highly strategic global asset. With this acquisition, RockTenn's fiber input ratio will be 55% virgin and 45% recycled. We believe this transaction provides the greatest possible career opportunities for our co-workers from both companies."
Smurfit-Stone's Chief Executive Officer Patrick J. Moore said, "The Smurfit-Stone management team and the board of directors are sharply focused on creating value for shareholders. This transaction immediately achieves this objective, creating a stronger combined company that is well positioned to deliver long-term value to shareholders and high-quality, innovative packaging solutions to its valued customers."
Combined RockTenn and Smurfit-Stone
* #2 producer of North American containerboard
* #2 producer of coated recycled board
* Management team with strong record of shareholder value creation and excellent record of integrating acquisitions
* Balanced fiber input mix with 55% virgin fiber and 45% recycled fiber
* Expands Rock-Tenn's geographic footprint to the Midwest and West Coast
* Opportunity to recognize benefits from approximately $500 million of NOLs at Smurfit-Stone
* Conservative capital structure with significant liquidity
* Opportunity to improve results through cost reduction and capital investment
Transaction Summary
Smurfit-Stone will become a wholly owned subsidiary of RockTenn. For each share of Smurfit-Stone common stock, Smurfit-Stone stockholders will be entitled to receive 0.30605 shares of RockTenn common stock and $17.50 in cash, representing 50% cash and 50% stock. The aggregate consideration is $35 per Smurfit-Stone common share. The consideration represents a 27% premium to Smurfit-Stone's closing stock price on January 21, 2011.
The aggregate purchase price being paid for Smurfit-Stone's equity in the transaction is approximately $3.5 billion, consisting of approximately $1.8 billion of cash and the issuance of 30.9 million shares of RockTenn common stock. Following the acquisition, RockTenn shareholders will own approximately 56% and Smurfit-Stone shareholders will own 44% of the combined company.
In addition to the equity consideration, RockTenn will assume Smurfit-Stone's net debt and pension liabilities. As of December 31, 2010 Smurfit-Stone's net debt was $0.7 billion and its pension liabilities were $1.1 billion ($0.7 billion after-tax). RockTenn has received $3.7 billion in committed bank financing from Wells Fargo Bank N.A., Rabobank and SunTrust Bank to finance the cash portion of the transaction, to refinance existing debt and to provide liquidity for the combined operations.
The purchase price, including Smurfit-Stone's net debt and after-tax pension liability as of December 31, 2010, represents a multiple of 6.1x Smurfit-Stone's annualized adjusted EBITDA of $820 million for the three months ended December 31, 2010.
The transaction is expected to close in the second calendar quarter of 2011 and is subject to customary closing conditions, regulatory approvals, as well as approval by both RockTenn and Smurfit-Stone stockholders.
Advisors
Wells Fargo Securities acted as exclusive financial advisor to RockTenn and King & Spalding LLP acted as legal counsel. Smurfit-Stone's financial advisor was Lazard and its legal advisor was Wachtell, Lipton, Rosen & Katz.
Conference Call and Webcast
RockTenn will host a conference call to discuss our results of operations for the first quarter of fiscal 2011, our acquisition of Smurfit-Stone Container Corporation and other topics that may be raised during the discussion at 8:30 a.m., Eastern Time, on Monday, January 24, 2011. The conference call will be webcast live with an accompanying slide presentation, along with a copy of this press release, at www.rocktenn.com.
Conference Call and Webcast
Monday, Jan. 24, 2011 - 8:30 a.m. Eastern Time
* Conference call number: U.S. (888) 790-4710
* Passcode: ROCKTENN (Please dial in 10 minutes before conference call start time)
* The call will also be webcast and available at: www.rocktenn.com
Replays
* A replay of the conference call will be available through March 15, 2011 at U.S. (866) 351-2785
* Passcode: ROCKTENN
* A replay of the webcast will be available at www.rocktenn.com
This strategic transaction, unanimously approved by the Boards of Directors of both companies, will create a $9 billion leader in the North American paperboard packaging market. Upon closing, RockTenn will maintain its headquarters in Norcross, GA.
Smurfit-Stone is one of the industry's leading integrated containerboard and corrugated packaging producers and one of the world's largest paper recyclers. Smurfit-Stone has manufacturing mill capacity of 7.0 million tons, and when combined, RockTenn will have 9.4 million tons of total production capacity, including 7.5 million tons of mill production in the attractive containerboard market.
RockTenn's Chairman and Chief Executive Officer, James A. Rubright said, "RockTenn's acquisition of Smurfit-Stone is another major step in our transformation of RockTenn to be the most respected company in our business with a laser focus on exceeding our customers' expectations and creating long term shareholder value. The containerboard and corrugated packaging industry is a very good business and U.S. virgin containerboard is a highly strategic global asset. With this acquisition, RockTenn's fiber input ratio will be 55% virgin and 45% recycled. We believe this transaction provides the greatest possible career opportunities for our co-workers from both companies."
Smurfit-Stone's Chief Executive Officer Patrick J. Moore said, "The Smurfit-Stone management team and the board of directors are sharply focused on creating value for shareholders. This transaction immediately achieves this objective, creating a stronger combined company that is well positioned to deliver long-term value to shareholders and high-quality, innovative packaging solutions to its valued customers."
Combined RockTenn and Smurfit-Stone
* #2 producer of North American containerboard
* #2 producer of coated recycled board
* Management team with strong record of shareholder value creation and excellent record of integrating acquisitions
* Balanced fiber input mix with 55% virgin fiber and 45% recycled fiber
* Expands Rock-Tenn's geographic footprint to the Midwest and West Coast
* Opportunity to recognize benefits from approximately $500 million of NOLs at Smurfit-Stone
* Conservative capital structure with significant liquidity
* Opportunity to improve results through cost reduction and capital investment
Transaction Summary
Smurfit-Stone will become a wholly owned subsidiary of RockTenn. For each share of Smurfit-Stone common stock, Smurfit-Stone stockholders will be entitled to receive 0.30605 shares of RockTenn common stock and $17.50 in cash, representing 50% cash and 50% stock. The aggregate consideration is $35 per Smurfit-Stone common share. The consideration represents a 27% premium to Smurfit-Stone's closing stock price on January 21, 2011.
The aggregate purchase price being paid for Smurfit-Stone's equity in the transaction is approximately $3.5 billion, consisting of approximately $1.8 billion of cash and the issuance of 30.9 million shares of RockTenn common stock. Following the acquisition, RockTenn shareholders will own approximately 56% and Smurfit-Stone shareholders will own 44% of the combined company.
In addition to the equity consideration, RockTenn will assume Smurfit-Stone's net debt and pension liabilities. As of December 31, 2010 Smurfit-Stone's net debt was $0.7 billion and its pension liabilities were $1.1 billion ($0.7 billion after-tax). RockTenn has received $3.7 billion in committed bank financing from Wells Fargo Bank N.A., Rabobank and SunTrust Bank to finance the cash portion of the transaction, to refinance existing debt and to provide liquidity for the combined operations.
The purchase price, including Smurfit-Stone's net debt and after-tax pension liability as of December 31, 2010, represents a multiple of 6.1x Smurfit-Stone's annualized adjusted EBITDA of $820 million for the three months ended December 31, 2010.
The transaction is expected to close in the second calendar quarter of 2011 and is subject to customary closing conditions, regulatory approvals, as well as approval by both RockTenn and Smurfit-Stone stockholders.
Advisors
Wells Fargo Securities acted as exclusive financial advisor to RockTenn and King & Spalding LLP acted as legal counsel. Smurfit-Stone's financial advisor was Lazard and its legal advisor was Wachtell, Lipton, Rosen & Katz.
Conference Call and Webcast
RockTenn will host a conference call to discuss our results of operations for the first quarter of fiscal 2011, our acquisition of Smurfit-Stone Container Corporation and other topics that may be raised during the discussion at 8:30 a.m., Eastern Time, on Monday, January 24, 2011. The conference call will be webcast live with an accompanying slide presentation, along with a copy of this press release, at www.rocktenn.com.
Conference Call and Webcast
Monday, Jan. 24, 2011 - 8:30 a.m. Eastern Time
* Conference call number: U.S. (888) 790-4710
* Passcode: ROCKTENN (Please dial in 10 minutes before conference call start time)
* The call will also be webcast and available at: www.rocktenn.com
Replays
* A replay of the conference call will be available through March 15, 2011 at U.S. (866) 351-2785
* Passcode: ROCKTENN
* A replay of the webcast will be available at www.rocktenn.com
Companies in this article