Packaging Corp. secures bridge financing for $2 billion Boise purchase

By Lisa Kerner

Charlotte, N.C., Sept. 16 - Packaging Corp. of America (PCA) has committed bridge financing in place from Bank of America Merrill Lynch to fund its proposed buyout of Boise Inc. for about $2 billion, according to a presentation on Monday.

The companies announced a definitive agreement under which PCA would acquire all of the outstanding common shares of Boise for $12.55 per share in cash, for a total transaction value of $1,995,000,000, including $714 million of outstanding debt.

PCA said it plans to refinance existing Boise debt and acquired equity in a $2 billion debt offering.

The transaction is expected to close in the fourth quarter, subject to certain customary conditions and regulatory approvals, according to a company news release.

With the acquisition of Boise, PCA becomes a $5.5 billion revenue company, with EBITDA of about $1 billion.

At June 30, PCA's cash and equivalents totaled $136 million, and its net debt totaled about $2.5 billion, on a pro forma basis.

According to the presentation, PCA expects to delever the balance sheet with meaningful cash flow generation post-merger and to reduce debt by $1 billion over three to four years.

Boise manufactures a variety of packaging and paper products.

Packaging Corp. of America is a Lake Forest, Ill.-based manufacturer of containerboard and packaging.

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