The US-based company said it expects to close the deal by either the end of this year or early 2012.
Hexacomb produces kraft paper-based honeycomb protective packaging for a range of sectors including food. The firm has a workforce of around 440 spread across 12 plants in six countries. In the year to August 2011, it posted revenues of almost $110m and converted approximately 60,000 tons of containerboard.
Boise president and CEO Alexander Toeldte said the acquisition would allow it to expand its packaging footprint, particularly in the wake of its purchase of Tharco earlier this year. It would also reduce the firm’s dependence on linerboard shipments abroad.
“Hexacomb has demonstrated strong growth in both sales and profitability, with compound annual sales growth over 10% since 2009,” he added. “Hexacomb operates in a growing market that is complementary to our existing packaging business and provides another substantial step up in vertical integration within our existing packaging business, creating value by increasing margins and reducing our reliance on linerboard export markets. “
$5m synergies
The deal would yield annual synergies of around $5m, thanks to “increased integration along with targeted cost savings and incremental growth”.
The yearly savings would be made within two years of completing the transaction, said the Boise chief, adding that Hexacomb would begin making a positive contribution to the balance sheet within 12 months.
Pregis, which also producers protective packaging, said the proceeds from the sale would be used to reduce company debt and other “corporate purposes”.
“The sale of Hexacomb is part of Pregis’ objective to optimse our overall business unit portfolio,” said company president and CEO Glenn Fischer.