Kapstone Paper & Packaging Corporation has completed the acquisition of the Charleston Kraft Division of MeadWestvaco Corporation (CKD) from MeadWestvaco Corporation (MWV).
Under the terms of the sale, KapStone acquired MWV’s Kraft paper mill in North Charleston, a lumber mill in Summerville South Carolina (SC) and chip mills located in Elgin, Hampton, Andrews and Kinards SC, as well as 100% of Cogen South LLC, the mill’s on-site cogeneration facility.
In 2007, the North Charleston mill produced 833,000 tons of saturating Kraft, linerboard and Kraft folding carton board. MWV will continue to provide wood fibre for the North Charleston mill through a fibre supply agreement.
“The acquisition of the Charleston Kraft
Division of MeadWestvaco Corporation is an
important step for our company,” said Roger W Stone, chairman and ceo of KapStone. “It expands our platform, from which we intend to achieve our strategic vision.”
The US$485m base purchase price was adjusted to reflect estimated working capital and capital expenditure adjustments. As a result, KapStone paid MWV approximately US$475m in cash, subject to certain post-closing adjustments. Funding for the acquisition came from borrowing under a new US$515m senior secured credit facility announced on June 12, 2008 plus US$40m of
borrowings from the issuance of senior notes.