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Packaging Corporation (PKG) Acquires Columbus Container

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Packaging products manufacturer Packaging Corporation of America (PKG - Free Report) has completed the acquisition of corrugated products producer, Columbus Container, Inc. for $100 million. The buyout is a strategic fit for Packaging Corporation and is expected to be immediately accretive to earnings.

Packaging Corporation has acquired a full-line corrugated products business located in Columbus, IN along with five warehousing facilities and other connected units located in Indiana and Illinois. The acquisition is anticipated to increase containerboard production by over 30,000 tons.

On Aug 29, Packaging Corporation completed the acquisition of TimBar Corporation for $386 million, in cash. The transaction was funded through a five-year term loan facility. This acquisition is estimated to increase containerboard integration by over 200,000 tons or 6% from its previous level of 87%. Further, the transaction allowed further optimization and enhancement of its mill capacity and was accretive with immediate effect.



The company’s corrugated product manufacturing plants produce a wide variety of packaging products, including conventional shipping containers used to protect and transport manufactured goods. Further, it produces multi-colored boxes and displays with strong visual appeal that aid merchandise across retail locations. Additionally, Packaging Corporation is a large producer of packaging for meat, fresh fruit and vegetables, processed food, beverages as well as other industrial and consumer products. The diverse product portfolio neutralizes operating risks associated with any downturn in a particular product category and ensures a steady revenue stream.

Headquartered in Lake Forest, IL, Packaging Corporation is the fourth-largest producer of containerboard and corrugated packaging products in the U.S. and the third-largest producer of uncoated freesheet paper in North America. PCA operates eight mills and 95 corrugated products plants and related facilities.

Packaging Corporation carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks include Deere & Company (DE - Free Report) , Alarm.Com Holdings, Inc. (ALRM - Free Report) and MRC Global Inc. (MRC - Free Report) .

Deere has an impressive track record of earnings surprise with an average positive earnings surprise of 58.17% in the last four quarters and sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Alarm.Com Holdings carries a Zacks Rank #2 and has an average positive earnings surprise of 165.56% in the last four quarters. MRC Global, another Zacks Rank #2 stock has delivered a positive average earnings surprise of 83.27% in the last four quarters.

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