Caraustar Acquiring Smurfit-Stone Units

Caraustar Industries Inc. said it plans on buying Smurfit-Stone Container’s Industrial Packaging Group for about $79.8 million.

The Smurfit business consists of 17 paper tube and core plants, three uncoated recycled paperboard mills and three partition manufacturing plants in the United States and Canada.

The three paperboard mills shipped about 118,000 tons of uncoated recycled boxboard in 2001, of which 55,000 tons were used by the paper tube and core converting facilities, 24,000 tons were shipped to other Smurfit operations and 40,000 tons were shipped to external customers. The converting facilities consumed approximately 125,000 tons of uncoated recycled boxboard, of which 55,000 tons were supplied by the three Smurfit mills, with the balance purchased from external suppliers.

In accordance with the terms of long-term supply agreements, Caraustar will supply Smurfit with tubes and cores and uncoated recycled boxboard that are currently supplied internally.

Caraustar said it will continue to operate the paperboard mills, which are in Tacoma, Wash., Lafayette, Ind. and Cedartown, Ga.

However, Caraustar expects to take a charge of about $5 million in costs associated with the anticipated closing of several other facilities.

The acquisition is expected to close on or before August 22.

Caraustar mills will begin supplying about 31,000 tons annually of uncoated recycled boxboard that Smurfit has been purchasing from others. This additional tonnage should allow Caraustar to increase its uncoated mill capacity utilization rate to about 100 percent, the company said.