Zacks Investment Research | Dec 15, 2017 05:03AM ET
WestRock Company (NYSE:WRK) has entered into agreement to acquire substantially all of the assets of Plymouth Packaging, Inc. The buyout will boost WestRock’s margin performance and growth prospects in corrugated packaging business. The deal will also improve its innovation platform and differentiation strategy.
Why Plymouth?
Plymouth is a corrugated packaging company that derives approximately 70% of sales from its Box on Demand systems and corrugated fanfold, and 30% from traditional corrugated box packaging. The company installs Box on Demand machines at its customers’ sites under multi-year exclusive agreements for the fanfold corrugated supply. It currently supplies more than 100 customers with proprietary Box on Demand machines, manufactured by Panotec.
The Deal
As part of the deal, WestRock will buy Plymouth’s equity interest in Panotec, and Plymouth’s exclusive right to distribute Panotec’s equipment in the United States and Canada.
Moreover, the acquisition includes Plymouth’s fanfold corrugated facilities in Battle Creek, MI; Ft. Worth, TX; and Mechanicsburg, PA; and all of its Box on Demand machines located at customers’ facilities. The transaction is subject to customary closing conditions.
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