Rock-Tenn to Buy Southern Container for $851 Million

Jan. 11, 2008 - Rock-Tenn Company late yesterday announced that it has agreed to acquire the stock of Southern Container Corp., a privately-held containerboard manufacturing and corrugated packaging business, for $851 million in cash.

All corporate approvals of the deal have been received, Rock-Tenn said.

Southern Container operates the Solvay mill, a 720,000 ton per year recycled containerboard plant located near Syracuse, NY, as well as eight integrated corrugated box plants, two sheet plants, and four high impact graphics facilities.

According to Rock-Tenn, Southern Container will have approximately $142 million in debt outstanding immediately after the acquisition.

Rock-Tenn said it plans to finance the acquisition with proceeds from $1.4 billion in new credit facilities and the sale of unsecured senior notes. The $1.4 billion will provide Rock-Tenn with funding to complete the acquisition, refinance its existing credit facilities and provide in excess of $200 million of undrawn capacity.

“We believe Southern Container represents a unique opportunity for Rock-Tenn to expand our corrugated and merchandising display businesses," said Rock-Tenn's chairman and CEO, James Rubright.

"Our strategy has been to expand and improve our businesses by acquiring very low cost, well invested assets. Southern Container fits this strategy perfectly. It has consistently earned industry leading EBITDA margins with its low cost Solvay mill, modern box plant system and preprint graphics capability,” Rubright added.

Rock-Tenn expects to close the deal in late March 2008.

SOURCE: Rock-Tenn Company

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