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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (640)	5/3/2005 1:58:21 AM
From: richardred	Read Replies (1) \| Respond to of 7254

RKT-Taking on new debt. IMO-a less likely target for Mead now then before. Rock-Tenn to Buy Carton Plants for $540M Thursday April 28, 1:27 pm ET Rock-Tenn to Acquire Paper, Packaging Businesses From Gulf States for $540 Million NORCROSS, Ga. (AP) -- Rock-Tenn Co., one of the nation's largest makers of folding cartons, said Thursday that it is buying the pulp and paperboard packaging operations of Gulf States Paper Corp. for $540 million. The company's shares fell $1.46, or 12.2 percent, to a new 52-week low of $10.52 in afternoon trading on the New York Stock Exchange. biz.yahoo.com Rock-Tenn said it will become the No. 2 U.S. carton producer after adding Gulf States' 11 folding-carton plants, which primarily serve the food and pharmaceutical industries and generated about $487 million in full-year sales through April 3. "This combination will greatly enhance our ability to serve our North American customers across our extremely diverse product lines," James Rubright, chairman and chief executive, said in a statement. "The transaction also provides us many opportunities to reduce our costs and increase our capabilities." Directors at both Rock-Tenn and Gulf States have approved the deal, which is expected to close in June pending clearance by regulators. Rock-Tenn said it plans to fund the acquisition with about $50 million in cash and proceeds from new credit lines it expects from Wachovia Capital Markets, SunTrust Capital Markets and Banc of America Securities. Operational savings of about $6 million over the two years following the transaction are expected to be offset by closing costs during the transition period, Rock-Tenn said.