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Monday, January 29, 2018

-=WestRock (WRK) reported earnings on Mon 29 Jan 2018 (BMO)

  • Also acquires KapStone Paper and Packaging (KS)
  • Update 10/30/18: KapStone Paper and Packaging merger with WestRock (WRK) cleared by the DOJ 

WestRock beats by $0.10, misses on revs 
  • Reports Q1 (Dec) earnings of $0.87 per share, excluding non-recurring items, $0.10 better thanthe Capital IQ Consensus of $0.77; revenues rose 13.0% year/year to $3.89 bln vs the $3.95 bln Capital IQ Consensus.
  • WestRock's Corrugated Packaging segment delivered Segment EBITDA margin of 19.6% and North American Adjusted Segment EBITDA margin of 21.4%, up 480 and 560 basis points, respectively.
KapStone Paper and Packaging to be acquired by Westrock Co. (WRK) for $35/share; expected to be immediately accretive to earnings 
KapStone Paper and Packaging is an American pulp and paper company. 
The company has kraft paper manufacturing facilities in Roanoke Rapids, NC, Cowpens, SC, North Charleston, SC, and Longview, WA, a lumber mill in Summerville, SC, 21 corrugated box and corrugated fiberboard plants and 65 packaging distribution centers. It has approximately 6,200 employees.
Headquarters: Northbrook, Illinois
Founded April 15, 2005

WestRock will acquire all of the outstanding shares of KapStone for $35.00 per share and will assume approximately $1.36 billion in net debt, for a total enterprise value of approximately $4.9 billion.
  • Expected to be immediately accretive to WestRock's adjusted earnings and cash flow, inclusive of purchase accounting adjustments.
  • WestRock will finance the cash consideration through the issuance of new debt under a fully committed financing package.
  • WestRock expects to refinance existing KapStone debt assumed as part of the transaction upon closing.

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