Advertisement
U.S. markets open in 3 hours 30 minutes
  • S&P Futures

    5,302.50
    -5.75 (-0.11%)
     
  • Dow Futures

    40,132.00
    -12.00 (-0.03%)
     
  • Nasdaq Futures

    18,469.50
    -34.25 (-0.19%)
     
  • Russell 2000 Futures

    2,133.90
    -4.50 (-0.21%)
     
  • Crude Oil

    81.85
    +0.50 (+0.61%)
     
  • Gold

    2,218.30
    +5.60 (+0.25%)
     
  • Silver

    24.57
    -0.19 (-0.76%)
     
  • EUR/USD

    1.0778
    -0.0051 (-0.47%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • Vix

    13.02
    +0.24 (+1.88%)
     
  • GBP/USD

    1.2593
    -0.0045 (-0.36%)
     
  • USD/JPY

    151.4530
    +0.2070 (+0.14%)
     
  • Bitcoin USD

    70,525.34
    +487.73 (+0.70%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,970.13
    +38.15 (+0.48%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

WestRock to Buy 5 Facilities from U.S. Corrugated Holdings

The provider of paper and packaging solutions – WestRock Company WRK – entered into a definitive agreement to acquire certain operations of U.S. Corrugated Holdings, Inc., a large independent manufacturer of corrugated products for packaging and displays. The buyout will broaden WestRock’s scope in regional markets.

Per the contract, WestRock will acquire five corrugated converting facilities in Ohio, Pennsylvania, and Louisiana, from U.S. Corrugated, through which it will provide a series of products and services to customers. Its products and services span across a variety of end markets, including food and beverage, pharmaceuticals and consumer electronics.

The buyout will enhance WestRock’s capabilities to serve customers across the Midwest. Further, the deal will improve the margins of its corrugated packaging business. Moreover, the transaction will provide significant synergy opportunities through containerboard integration, increased production and improved performance.

Westrock Company Price

 

Westrock Company Price | Westrock Company Quote

WestRock will pay a total consideration of approximately $192 million, representing an EBITDA multiple of five times on a post-synergy basis. The transaction, which is anticipated to close in Jun 2017, includes cash and WestRock common stock, and will be accretive to earnings in the first year.

WestRock expects to realize significant synergies from supply chain optimization, better procurement and integrating approximately 105,000 tons of the containerboard converted annually by the acquired facilities. It will also secure another 50,000 tons under a long-term contract with a newly created company formed from the remaining assets of U.S. Corrugated.

WestRock continues to benefit from its acquisition strategy. The integration of the volume from the acquisition of the Carolina product line, the Cenveo Packaging acquisition and volume incorporation from the merger will prove conducive to growth.

Additionally, WestRock will gain from higher volumes, favorable mix and productivity, and focus on execution of its capital allocation strategy. Driven by these factors, the stock gained around 38%, outperforming the Zacks categorized Paper and Related Products sub-industry which recorded 19.5% growth, over the past one year.



WestRock currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same sector are The Chemours Company CC, Carpenter Technology Corporation CRS and Ferro Corporation FOE. All of these stocks boast a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has a remarkable positive average earnings surprise of 39.82% for the last four quarters. Carpenter Technology generated a positive average earnings surprise of 14.30% over the trailing four quarters. Ferro Corporation has delivered an average positive earnings surprise of 19.63% in the past four quarters.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana. Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Click for Free Chemours Company (The) (CC) Stock Analysis Report >>
 
Click for Free Ferro Corporation (FOE) Stock Analysis Report >>
 
Click for Free Westrock Company (WRK) Stock Analysis Report >>
 
Click for Free Carpenter Technology Corporation (CRS) Stock Analysis Report >>
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Advertisement