Bear State Financial Sold for $391 Million

Arvest Bank to acquire Bear State Financial for $10.28 per share

Bear State Financial Sold for $391 Million. See Stockwinners.com Market Radar for details.

Bear State Financial, parent company of Bear State Bank (BSF), and Arvest Bank jointly announced the signing of a definitive agreement for Arvest Bank to acquire Bear State in an all-cash transaction valued at approximately $391M, or $10.28 per share of Bear State common stock.

The agreement and plan of reorganization was unanimously approved by the boards of directors of each company.

The transaction is expected to close in Q4 or 1Q18 and is subject to customary conditions, including both regulatory approval and approval by Bear State’s shareholders.

Clients of Bear State Bank and Arvest Bank will not notice any immediate changes, and both banks will continue to conduct business as usual.

At a later date, Bear State Bank’s branding will change to Arvest Bank, with the full conversion of systems expected to occur in 2018.


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Sacramento Container Sold for $265 Million

Packaging Corp. to acquire Sacramento Container Corporation

Packaging Corp. to acquire Sacramento Container Corp. See Stockwinners.com Market Radar to read the details.

Packaging Corporation of America (PKG) announced that it has entered into a definitive agreement to acquire substantially all of the assets of Sacramento Container Corporation, and 100% of the membership interests of Northern Sheets and Central California Sheets in a cash-free, debt-free transaction for a cash purchase price of $265M.

The acquisition transaction is structured as a purchase of assets resulting in a full step-up of the assets to fair market value.

Under the terms of the agreement, PCA will acquire full-line corrugated products and sheet feeder operations in McClellan, California and Kingsburg, California.

The value of the expected synergies, the tax benefit of the step-up of assets and the operations’ EBITDA result in a purchase price multiple of approximately five times EBITDA.

The acquisition will be accretive to earnings immediately. Closing is subject to certain customary conditions and regulatory approval and is expected early in the fourth quarter of 2017. The company plans to finance the transaction with available cash on hand.

WALLULA  MILL   PLANT

Separately, Packaging Corporation of America (PKG) announced that it will discontinue production of uncoated freesheet and coated one-side grades at its Wallula, Washington mill in the second quarter of 2018 to begin the conversion of its 200,000 ton-per-year No. 3 paper machine to a 400,000 ton-per-year high-performance 100% virgin kraft linerboard machine.

The conversion of the No. 3 paper machine at the Wallula Mill is planned for the second quarter of 2018 with an initial production rate of approximately 60 percent of capacity.

Ultimately, production will increase to 1,150 tons per day once a new headbox, forming section, and shoe press are added in the fourth quarter of 2018. The capital cost of the conversion is expected to be approximately $150M.

Discontinuing paper operations at the Wallula Mill will result in pre-tax cash severance and other shutdown charges of approximately $20M-$25M and approximately $45M-$55M of pre-tax noncash asset impairment and accelerated depreciation charges. Charges of $25M-$35M are expected to be recorded in the third quarter of 2017.

The Mill’s No. 2 paper machine will continue to produce 150,000 tons-per-year of semi-chemical medium.

PCA Chairman and CEO Mark Kowlzan said, “Our strategy is to improve the overall profitability of the paper business for PCA by focusing our people and investments on increasing our competitiveness and ensuring a sustainable future in the office and printing & converting markets with our mills in International Falls, MN and Jackson, AL.

In addition, at our current containerboard integration rate of 95%, the low-cost conversion of the No. 3 paper machine at our Wallula Mill provides us with much needed linerboard capacity, allows us to integrate over 200,000 tons of containerboard to our Sacramento Container acquisition, and enables further optimization and enhancement of our current mill capacity and box plant operations. The conversion will significantly enhance the mill’s profitability and viability.”


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