Packaging Corporation of America has signed an agreement to acquire independent corrugated products producer TimBar for $386m.
As per the terms of the deal, PCA will acquire TimBar's five corrugated products plants, two fulfillment centers and four design centers located primarily in the eastern and southeastern US.
TimBar provides solutions to customers in the higher margin retail, industrial packaging, and display and fulfilment markets. It focuses on multi-color graphics and technical innovation.
PCA Chairman and CEO Mark Kowlzan said, "Following our successful integration of Boise, including the capacity we now have at the DeRidder, LA mill, this acquisition is an excellent fit, both geographically and strategically, with substantial benefits and synergies.
"We look forward to working together to further enhance our strong balance sheet, financial results and cash flow consistent with our strategy to return significant value to our shareholders."
PCA expects the deal to increase containerboard integration level by more than 200,000t.
Scheduled to be completed in the third quarter of 2016, the transaction is subject to certain customary conditions and regulatory approval.
PCA Corrugated Products executive vice-president Tom Hassfurther said: "The highly-skilled employees, culture and customer base of TimBar complements PCA extremely well and allows us to apply our operating and sales expertise across a larger system providing significant growth potential.
"This enables us to optimize our focus on customized solutions for our customers and makes us less reliant on the export market while maintaining strategic relationships with our key export customers."
PCA is the producer of containerboard and corrugated packaging products and is claimed to be the third largest producer of uncoated freesheet paper in North America.
The firm operates eight mills and 90 corrugated products plants and related facilities.
