Temple-Inland Inc. (TIN), a manufacturer of corrugated packaging and building products, announced on Friday that it has acquired the remaining fifty percent interest in Premier Boxboard Limited LLC from Caraustar Industries, Inc. (CSAR) for $62 million in cash and assumption of $25 million of debt.
Temple-Inland said that the transaction will be immediately accretive to its earnings, returns and cash flow. Further, it expects to realize synergies of approximately $10 million from reducing cost, improving productivity and optimizing the mix of product as the mill is fully integrated into the Temple-Inland mill system.
Premier Boxboard Limited LLC or PBL was a joint venture between Temple-Inland and Caraustar. It produces lightweight gypsum facing paper and containerboard at 308,000 tons per year mill in Newport, Indiana.
For the last three years, PBL's average annual EBITDA was $23 million, and for first quarter 2008 EBITDA was $7 million, Temple-Inland noted.
The Austin, Texas-based Temple-Inland noted that it will fund the cash portion of the purchase price through borrowings under its existing credit facilities.
TIN is trading up $0.64 or 4.84% at $13.85 on a volume of 446 thousand shares.
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