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RockTenn entered into an agreement whereby RockTenn will acquire the Simpson Tacoma Kraft Paper Mill located in Tacoma, Washington, for approximately $343 million.

The purchase price reflects an EBITDA multiple of less than six times based on the mill’s financial results for the 12 months ending December 2013 and the expected operating efficiencies, primarily due to the location of the mill.

In 2013, the mill produced 465,000 tons on two paper machines and two pulp dryers that made various paper grades including containerboard, specialty kraft paper and pulp. The Tacoma Kraft Mill operates a 55 megawatt green biomass fuel cogeneration facility that was completed in 2009 and sells electricity under a long-term contract.

RockTenn has committed to invest $60 million in the mill during the next three years.

The transaction is subject to customary closing conditions and regulatory approvals.

Published in the May 2014 Edition of American Recycler News