Temple-Inland Acquires Caraustar Interest in Mill

Temple-Inland Inc. has acquired the remaining fifty percent interest in Premier Boxboard Ltd. LLC from Caraustar Industries, Inc.

PBL was a joint venture between Temple-Inland and Caraustar. The purchase price for Caraustar’s interest was $62 million in cash and assumption of $25 million of debt associated with the purchased interest.

PBL produces lightweight gypsum facing paper and containerboard at a 308,000 tons per year mill in Newport, Indiana. Temple-Inland will continue to produce lightweight gypsum facing paper and containerboard at the mill. The lightweight gypsum facing paper will serve the needs of both Temple-Inland’s building products operations and external customers.

Caraustar has been the managing partner of PBL since its formation in 1999. Effective today, Temple-Inland terminated the marketing and management agreements by and between PBL and Caraustar. Marketing and management fees paid by PBL to Caraustar under these agreements have been about $4 million a year.

In announcing the transaction, Doyle R. Simons, chairman and CEO of Temple-Inland said, "The acquisition of Caraustar’s interest in PBL is consistent with Temple-Inland’s key objectives of maximizing ROI and profitably growing our business.

"The Newport mill is a high-quality, well-invested facility that obtains its process steam pursuant to a long-term contract with an adjacent coal-fired power plant. We are confident in our ability to successfully integrate the mill into our system and improve its financial performance. This transaction will be immediately accretive to Temple-Inland’s earnings, returns and cash flow. We look forward to the PBL employees being a part of the Temple-Inland team."