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Rock-Tenn to acquire paper company

LAWRENCEVILLE - Rock-Tenn Co. said on Thursday it plans to acquire Gulf States Paper Corp.'s pulp and paperboard business for $540 million.

The move helps the Norcross-based company expand its reach.

Gulf States operates 11 folding carton plants, serving primarily food packaging, food service and pharmaceutical and health and beauty markets. Recent net sales of the acquired Gulf States business were $487 million.

Gulf States and Rock-Tenn Company have approved the transaction, but the closing is subject to regulatory review and other customary closing conditions. Rock-Tenn plans to finance the purchase with about $50 million of cash on hand and proceeds from new credit lines.

Rock-Tenn's Chairman and Chief Executive Officer James Rubright said "Gulf States' paperboard and packaging business is the best possible strategic combination for our recycled paperboard and folding carton business. Gulf States' very low cost bleached paperboard mill, strong folding carton plants and focus on attractive major food and food service markets are great

complements to our existing business."

- From staff reports