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

To: richardred who wrote (736)	6/7/2005 12:53:09 AM
From: richardred	Respond to of 7256

Rock-Tenn Company Announces Completion of Acquisition of Gulf States Paperboard Corporation Pulp and Paperboard and Paperboard Packaging Divisions' Assets Monday June 6, 5:00 pm ET NORCROSS, Ga.--(BUSINESS WIRE)--June 6, 2005--Rock-Tenn Company (NYSE: RKT - News) announced today that it has completed the acquisition of the assets of Gulf States' Paperboard and Packaging (GSPP) business. Rock-Tenn has acquired one of the lowest cost solid bleached sulphate paperboard mills in North America, with annual capacity of 327,000 tons of bleached paperboard and 91,500 tons of southern bleached softwood kraft pulp. The acquisition also included 11 folding carton plants that serve primarily the food packaging, food service and pharmaceutical and health and beauty markets. Rock-Tenn announced a definitive agreement to acquire the assets of GSPP on April 28, 2005. Rock-Tenn has entered into a $700 million Senior Credit Facility providing the primary funding to finance the acquisition. The facility is secured by the GSPP assets acquired and Rock-Tenn's inventory and certain intangible assets and is pre-payable at any time. Rock-Tenn Company has retained only those SG&A employees that are needed to support the GSPP business going forward. As a result, the Company expects to realize approximately $13 million of annualized synergies in the first months following the closing, although a portion of these synergies are expected to be offset during the remainder of calendar 2005 from transition costs incurred to integrate the systems and operations of GSPP. The Company expects to realize total annualized synergies of $20 million as a result of the transaction; the expected incremental synergies will result primarily from operating synergies over the 24 months following the close. Rock-Tenn Company Chairman and Chief Executive Officer James A. Rubright commented, "The acquisition of the Demopolis mill gives us entry into the production of the premium paperboard substrate of the folding carton industry. The geographical footprint and technological capabilities of the 11 folding carton plants we have acquired provide a terrific complement to our 18 folding carton plants. We believe that there are significant cost saving opportunities from optimizing our folding carton operations. We also believe that we will be able to generate a significant amount of free cash flow that we expect to use primarily to pay down debt, as we have targeted a debt reduction goal of $180 million by September 2007." Rock-Tenn Company provides marketing and packaging solutions to consumer products companies at low costs, with annual net sales of $2.1 billion and operating locations in the United States, Canada, Mexico and Chile. The Company is one of North America's leading manufacturers of packaging products, merchandising displays and bleached and recycled paperboard. Statements herein regarding anticipated operating synergies, transition costs, cost saving opportunities, facility optimization, cash flow generation and debt paydown constitute forward-looking statements within the meaning of the federal securities laws and are subject to certain risks and uncertainties. With respect to these statements, the Company has made assumptions regarding, among other things, economic, competitive and market conditions generally; volumes and price levels of purchases by customers; competitive conditions in our businesses and possible adverse actions of our customers, our competitors and suppliers. Management believes its assumptions are reasonable; however, undue reliance should not be placed on such estimates, which are based on current expectations. There are many factors that impact these forward-looking statements that we cannot predict accurately. Further, our business is subject to a number of general risks that would affect any such forward-looking statements including, among others, decreases in demand for the Company's products; increases in energy, raw materials, shipping and capital equipment costs; reduced supply of raw materials; fluctuations in selling prices and volumes; intense competition; the potential loss of certain customers; and adverse changes in general market and industry conditions. Such risks and other factors that may impact our assumptions are more particularly described in the Company's filings with the Securities and Exchange Commission, including under the caption "Business -- Forward-Looking Information and Risk Factors" in the Company's Annual Report on Form 10-K for the most recently ended fiscal year. The information contained herein speaks as of the date hereof and the Company does not have or undertake any obligation to update such information as future events unfold. Contact: Rock-Tenn Company David Rees, 678/291-7552 drees@rocktenn.com biz.yahoo.com