RockTenn and Simpson Lumber Co. LLC announced an agreement whereby RockTenn will acquire the Simpson Tacoma Kraft Paper Mill located in Tacoma, Wash., for approximately $343 million. The purchase price reflects an EBITDA multiple of less than six times based on the mill’s financial results for the 12 months ending December 2013 and the expected operating efficiencies, primarily due to the location of the mill on the West Coast. The transaction is structured as an asset purchase.

RockTenn has committed to invest $60 million in the mill during the next three years and has also entered into a seven-year wood chip supply contract with Simpson Lumber Co..

“The Tacoma Kraft Mill is a great strategic fit for RockTenn,” says Steve Voorhees, RockTenn’s CEO. “Adding a West Coast mill will improve our ability to satisfy West Coast customers and generate significant operating efficiencies across our system.”

“This is exciting news for Tacoma Kraft employees and the community. The Tacoma Kraft Mill will be better positioned as part of RockTenn — a successful fiber-based company that is committed to the long-term success of the mill,” says Allan Trinkwald, president, Simpson Lumber Co. LLC.

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