Smurfit-Stone Acquires Boxmaker Calpine

Smurfit-Stone Container Corp., Chicago, has signed a letter of intent to take controlling interest in Calpine Corrugated LLC, a California-based producer of corrugated containers.

Calpine Corrugated, based in Fresno, has experienced start-up losses since it began operations in 2006, according to a Smurfit-Stone news release. Smurfit-Stone, which has been the primary containerboard supplier to Calpine, will take a 90 percent ownership interest in Calpine Corrugated if the transaction closes as expected in the second quarter of 2008.  

“The acquisition of Calpine Corrugated fits our strategy to establish one of the most modern converting operations in North America,” says Patrick J. Moore, Smurfit-Stone chairman and CEO. “Operating some of the best packaging assets on the West Coast, Calpine serves the important California agriculture market. The combination of Calpine and our new state-of-the-art facility in the Los Angeles market, expected to be operational in the third quarter, will significantly upgrade Smurfit-Stone’s West Coast packaging operations.”  

Smurfit-Stone has also announced that it will report a first quarter adjusted net loss of $0.09 per share, comparable with prior year results.

Smurfit-Stone had previously stated its expectation of sequentially lower results due to seasonally higher energy usage and the timing of employee benefit costs. Results in the quarter were also affected by the $0.05 per share charge for the Calpine Corrugated acquisition, plus “significantly higher cost inflation, and softer box demand due to the slower U.S. economy,” according to the company.

“While our first quarter results were disappointing, we remain focused on transforming our operations to improve long-term financial performance,” says Moore. “I expect continued savings from our strategic initiatives program and returns on our container capital investments to benefit future earnings. Over the past two years we have reduced debt by more than $1 billion and will continue to improve our financial flexibility.”

Smurfit-Stone Container Corp. is a leading integrated containerboard and corrugated packaging producer and one of the world’s largest paper recyclers.