WestRock Co. announced Tuesday it is buying Multi Packaging Solutions International in a $1.4 billion deal that will add to its position as one of the nation’s largest paper and packaging makers.
The all-cash deal comes only one day after WestRock reached a deal to sell its health and beauty-related business to a Stamford, Conn., packaging manufacturer, Silgan Holdings, for $1.03 billion. Silgan makes metal and plastic containers for food and other consumer products.
WestRock said that move, which will free up about $1 billion in after-tax proceeds, was aimed at allowing WestRock to focus on its core business. The health and beauty business, which mostly makes plastic containers and dispensers for consumer products, had $560 million in revenue, compared to the firm’s total revenue of $14.1 billion last year.
In the deal announced today, WestRock said it will assume about $873 million of New York, N.Y.,-based MPS’ debt, bringing the total cost of the deal to about $2.3 billion. MPS had about $1.7 billion in revenue last year.
“The acquisition of MPS is an important step forward that advances our strategy and will create significant value for our customers, employees and shareholders,” said WestRock Chief Executive Steve Voorhees.
Also on Tuesday, WestRock reported profit of almost $81 million in its first fiscal quarter, which ended Dec. 31. That compares to a $454 million loss in the year-ago quarter, which included $482 million in write-offs from discontinued operations.
WestRock is itself the product of a 2015 merger between Georgia-based RockTenn Corp. and Virginia-based Mead-Westvaco.
The combined company, with about 39,000 employees, is headquartered in Richmond, Va., but also has what it calls a “home office” in Norcross, where Voorhees and other top executives work.
About 2,400 WestRock employees work in metro Atlanta, including about 1,760 in its home office operations at two sites in Norcross and another in Duluth.
The company said the planned MPS acquisition is expected to allow WestRock to reap about $85 million in “synergies” by the end of its 2019 fiscal year. Those savings often come through job cuts, closing redundant facilities and factories and savings on transportation and material purchases.
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