NORCROSS, Georgia – RockTenn on Friday, May 16, announced that it has completed the previously announced acquisition of the Simpson Tacoma Kraft Paper Mill located in Tacoma, Washington.
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 U.S. dollars in the mill during the next three years and has also entered into a 7-year wood chip supply contract with Simpson Lumber Company.
In a statement, Steve Voorhees, RockTenn's Chief Executive Officer, said the acquisition of the Tacoma Mill improves the company’s ability to satisfy West Coast customers while generating significant operating efficiencies across its system.
RockTenn acquired the mill for approximately $343 million U.S. dollars, including working capital adjustments. The purchase price reflects an EBITDA multiple of less than six times based on the mill's financial results for the 12 months ending March 2014 and the expected operating efficiencies, primarily due to the location of the mill on the West Coast.
The transaction was structured as an asset purchase.