Just weeks after completing the massive merger that formed it, a local Fortune 500 has a nine-figure acquisition in the works.
Packaging behemoth WestRock Co. announced Tuesday it is acquiring SP Fiber Holdings, a recycled containerboard and kraft and bag paper producer with mills in Georgia and Oregon. The deal, which is subject to regulatory approval, is valued at $288.5 million.
The deal is the first acquisition for WestRock since its formation last month from the merger of Richmond-based MeadWestvaco and Georgia-based Rock-Tenn Co. The marriage makes WestRock the second-largest packaging company behind International Paper, with a combined $15.7 billion in annual revenue.
Just prior to the merger, MeadWestvaco had acquired the Carolina brand line of coated paperboard from International Paper.
As part of this latest deal, WestRock will also acquire SP Fiber’s 48 percent interest in Green Power Solutions of Georgia, a renewable energy joint venture that provides energy to Georgia Power and steam to its paper mill there.
In a release, WestRock CEO Steve Voorhees said SP Fiber’s two mills will balance the fiber mix of WestRock’s mill system and diversify the company’s product offerings with the addition of kraft and bag paper.
SP Fiber produces those materials, along with containerboard, for use in consumer and corrugated packaging. The products are made from 100 percent post-consumer recycled fiber.
“We expect to apply our operating capabilities to improve the cost structure of both mills,” Voorhees said in the release. “As a result, our mill system will be better positioned to serve the increasing demand for lighter weight containerboard and kraft paper.”
The release said the transaction is expected to generate significant synergies and add to earnings in the second half of fiscal year 2016.
The company declined to comment beyond its press release, saying it doesn’t discuss pending transactions.
WestRock is headquartered in MWV’s downtown tower at 501 S. Fifth St. The company consists of 42,000 employees in locations in North America, South America, Europe and Asia.
Hope they Keep the HQ in Richmond!