NEW YORK (TheStreet) -- Packaging Corp. of America (PCA) (PKG) is buying packaging specialist Boise (BZ) in a deal worth almost $1.3 billion, pushing shares of both companies up in premarket trading on Monday.
Boise shares climbed 26.71% to $12.62 on news of the deal, which is expected to close in the fourth quarter. Shares of PCA rose 11.9% to $61.04.
PCA will pay $12.55 a share in cash for Boise's outstanding common shares. The total transaction value is $1.995 billion, although this includes $714 million of outstanding Boise debt.
"The acquisition is an excellent fit, both geographically and strategically, with unique and substantial synergies," said PCA Executive Chairman Paul Stecko, in a statement. "It provides the containerboard that PCA needs to support our strong corrugated products growth."PCA said that its containerboard capacity under the deal will increase to 3.7 million tons from the current level of 2.6 million. The acquisition will increase PCA's corrugated products volume by about 30%, it added, and expand the company's market presence into the Pacific Northwest --Written by James Rogers in New York. Follow @jamesjrogers >Contact by Email.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV