) has wrapped up the purchase of the assets of specialty corrugated
packaging manufacturer Mid South Packaging LLC from the private
equity firm, Coridel Capital Partners LLC. The financial terms were
CLEARWATER PAPR (CLW): Free Stock Analysis
INTL PAPER (IP): Free Stock Analysis Report
ROCK-TENN CO (RKT): Free Stock Analysis Report
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Mid South Packaging has its operations in Cullman, Alabama, and
Olive Branch, Mississippi. It operates through three segments,
namely, AutoLogic, the ComboPAC Food Group and the Retail Design
The acquisition of the Mid South assets will not only benefit
RockTenn by expanding its existing product portfolio but will also
broaden and diversify its customer base with the inclusion of
Mid South's customers.
Earlier, in 2011, RockTenn had acquired Smurfit-Stone Container
Corporation through the merger of Smurfit-Stone into one of its
wholly-owned subsidiaries. The acquisition expanded RockTenn's
corrugated packaging business and helped it to increase its market
share in the much profitable containerboard and corrugated
Following the acquisition of Smurfit-Stone, RockTenn re-aligned its
businesses into three segments (Corrugated Packaging, Consumer
Packaging and Recycling and Waste Solutions). Smurfit-Stone
now represents roughly two-thirds of RockTenn's revenues.
Based in Norcross, Georgia, RockTenn is a leading manufacturer of
corrugated and consumer packaging and recycling solutions. The
company focuses on low-cost paperboard and packaging products and
services. It caters to a wide customer base in the U.S., Canada,
Mexico, Chile, Argentina and China.
RockTenn delivered adjusted earnings of 97 cents per share in
second-quarter 2012. Revenues shot up 188% year-over-year to
$2,282.9 million, driven by the acquisition of Smurfit-Stone.
However, packaging industry being highly competitive, RockTenn
faces intense competition from companies like
Clearwater Paper Corporation
). Moreover, rising recycled fiber and chemical costs also remain
headwinds for the company.
RockTenn currently retains a short-term Zacks #3 Rank (Hold). We
have a long-term Neutral recommendation on the stock.