When a company seeks to expand its share of a market, they may consider the possibility of acquiring a competitor. While the complexities of an acquisition may expand when dealing with larger businesses, it is a strategy that even small to mid-sized businesses in Louisiana can utilize if properly managed. Yet, for all their complexities, acquisitions occur regularly in the business world and can help companies meet their business goals.
Recently, the Packaging Corporation of America finalized its acquisition of a smaller rival company Boise Inc. Both companies specialize in the manufacture of materials such as corrugated packaging and containerboard. Packaging Corp. acquired the company in an all-cash deal for the value of almost $2 billion. Without factoring in debts, this puts the value of Boise Inc. at approximately $1.28 billion. Boise had sales of $2.5 billion in the year proceeding June 30, and Packaging Corp. expects the new company to have strong financial results.
In statements made about the acquisition, the companies expect the process to be finalized in the fourth quarter of 2013. When the acquisition is complete, Packaging Corp. will have gained access to new markets as well as additional manufacturing capabilities, which includes a mill in DeRidder, Louisiana.
A spokesperson for Boise stated that they had agreed to the acquisition after contemplating a range of options. In the end, they came to believe that an acquisition would be in the best interest of the organization and its shareholders. While it is possible for an acquisition to occur without the approval of both companies, the deal between the two was friendly. However, a hostile acquisition can occur in certain circumstances where shareholders are convinced to approve an acquisition against the will of one company’s board. Louisiana business owners contemplating the ramifications of beginning an acquisition, or having their business be acquired, may benefit from seeking information from experienced legal experts specializing in business law.
Source: Equities.com, “Packaging Corp of America Agreed to $2 Billion Deal to Acquire Rival Boise Inc.” Andrew Klips, Sept. 16, 2013