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WestRock (WRK) on Buyout Spree, Set to Acquire Schluter

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WestRock Company (WRK - Free Report) recently entered into an agreement to acquire Schlüter Print Pharma Packaging — a German-based supplier of a full range of leaflets and booklets. Financial terms of the transaction have not been disclosed yet.

Why Schlüter?

Schlüter utilizes UV flexographic printing technology to produce film solutions in its primary packaging area. Its secondary packaging products include folding boxes and booklets, such as pharmaceutical mini-brochures. Moreover, Schlüter has an excellent reputation as a premium supplier to customers in the pharmaceutical and automotive industries.

Benefits of the Deal

The Schlüter acquisition will enable WestRock to improve its business in these growing markets. It will also help expand the geographical footprint to better serve customers in Europe. Post acquisition, Schlüter will become part of WestRock’s Multi Packaging Solutions business. The transaction is subject to customary closing conditions.

 

WestRock Company Price

 

WestRock Company Price | WestRock Company Quote

Acquisitions to Drive growth

Over the years, acquisitions have been a key growth catalyst for WestRock. In fiscal 2017, the company completed five buyouts, including the acquisition of Multi Packaging Solutions. Multi Packaging Solutions will fortify WestRock’s portfolio of differentiated value-added product offerings, as well as expand its operating footprint in Europe and Asia.

Also, WestRock completed the acquisition of Plymouth Packaging, Inc. — a corrugated packaging company — to tap the rising demand, and enhance its e-commerce and other custom applications. Further, in January 2018, WestRock had agreed to acquire all the outstanding shares of KapStone Paper and Packaging Corporation (KS - Free Report) , for a total enterprise value of around $4.9 billion.

The buyout will help WestRock expand its presence in the western U.S.  In addition, this will broaden the company’s differentiated paper and packaging solutions portfolio with the addition of attractive paper grades and distribution capabilities. Thus, the company will be able to strengthen its capabilities and solutions offerings for customers.

Share Price Performance

Over the past year, WestRock’s shares have underperformed the industry with respect to price due to higher costs. The company’s shares have gained around 2%, while the industry recorded growth of 19%.



 

Zacks Rank & Stocks to Consider

WestRock carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same sector are Domtar Corporation (UFS - Free Report) and Stora Enso Oyj (SEOAY - Free Report) . Both stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Domtar has a long-term earnings growth rate of 5%. The company’s shares have rallied 32% in the past year.

Stora Enso has a long-term earnings growth rate of 11.9%. The stock has gained 31% in a year’s time.

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