Founded in 2005 and headquartered in Northbrook, Illinois, KapStone is a North American producer and distributor of containerboard, corrugated products and specialty papers, including liner and medium containerboard, kraft papers and saturating kraft.
It also owns Victory Packaging, a packaging distribution company with facilities in the US, Canada and Mexico.
Upon completion of the transaction, KapStone will be integrated into WestRock’s Corrugated Packaging segment.
“KapStone is a great fit with WestRock. Their complementary corrugated packaging and distribution operations will enhance WestRock’s ability to serve customers across our system, particularly in the western United States, and the addition of their specialty kraft paper products that we do not make enhances our differentiated portfolio of paper and packaging,” said Steve Voorhees, CEO, WestRock.
The transaction is expected to generate annual run-rate cost synergies and performance improvements of approximately $200 million by the end of fiscal 2021 that WestRock expects will be captured through the integration of the KapStone operations into WestRock’s corrugated packaging system.
Virgin fiber based paper
Benefits include process and capital improvements at mill and box plant locations, converting and network optimization, procurement and administrative efficiencies.
The acquisition will enable WestRock to supply additional corrugated packaging to Victory Packaging and the acquisition will accelerate WestRock’s plans to improve margins in its North American corrugated packaging business.
It will also increase the mix of virgin fiber based paper in WestRock’s paper portfolio. KapStone’s 3 million tons of paper is made using 78% virgin fiber and 22% recovered fiber. This increases WestRock’s overall mix of virgin fiber from 65% to 67%.