Longview Fibre sold for $1.03 billion

Shares of Illinois-based KapStone Paper soar after cash purchase

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Company headquarters: Northbrook, Ill.

Stock exchange: Traded on New York Stock Exchange under the symbol KS. KapStone closed at $35.04.

Net income: Net income for the first quarter of 2013 was $18 million, or 38 cents a share; that's up from $10 million in the fourth quarter of 2012 and $16 million in the first quarter of 2012.

Chairman and CEO: Roger Stone

Company headquarters: Northbrook, Ill.

Stock exchange: Traded on New York Stock Exchange under the symbol KS. KapStone closed at $35.04.

Net income: Net income for the first quarter of 2013 was $18 million, or 38 cents a share; that’s up from $10 million in the fourth quarter of 2012 and $16 million in the first quarter of 2012.

Chairman and CEO: Roger Stone

Longview Fibre Paper & Packaging has been sold for $1.03 billion to KapStone Paper & Packaging Corp., an Illinois company with paper container and packaging mills spread across the south, the companies jointly announced Monday morning.

KapStone will buy Longview Fibre from private-equity fund Brookfield Capital Partners II — which is managed by Brookfield Asset Management Inc. — in a debt-free deal.

Brookfield, which turned the money-losing Longview mill into a profitable, expanding enterprise since purchasing it in 2007, has had Fibre on the sales block for more than a year. Many other potential buyers had been looking at Fibre.

Shares of Kapstone, which were halted ahead of the news, rose 10 percent to $32.75 in recent trading. The stock has more than doubled over the past year.

Fibre will be the first mill west of the Mississippi River to come under KapStone ownership. KapStone is a growing firm, having purchased International Paper Co.’s Kraft paper business in 2007.

Longview Fibre makes high-quality containerboard, lightweight high-performance multiwall paper, specialty Kraft papers and corrugated containers. The mill has five paper machines that produce 1.15 million tons of containerboard and Kraft paper annually.

Last year, the privately held company generated $831 million in net sales and $118 million of earnings before interest, taxes, depreciation and amortization, according to a prepared statement. In the first quarter of 2013, Longview Fibre’s net sales were $217 million.

KapStone Chairman and Chief Executive Roger W. Stone said the acquisition will immediately increase his company’s earnings and generate strong free cash flow. He said the buy will raise KapStone’s exposure to the containerboard segment, broaden its Kraft paper line and make KapStone a global producer of high performance extensible multiwall paper — a grade that he said is growing by about 4 percent a year.

The deal is expected to close this summer.