David Savastano, Editor12.14.15
What a difference a year makes.
A year ago, RockTenn and Mead Westvaco were two separate, sizable packaging businesses.
As 2015 opened, RockTenn was the fifth-largest packaging company, with $9.9 billion in sales in 2014; 72% of its sales were in the corrugated market. MWV was the 14th largest, with sales of $5.6 billion, 78% of which were in the consumer packaging segment.
On Jan. 26, 2015, these two companies announced a merger, forming WestRock. Combined, they would have net sales of more than $15 billion, making WestRock the second-largest corrugated and consumer packaging manufacturer, behind International Paper. The transaction closed on July 1, 2015.
One would think it would take a lot of time to merge the operations together, suggesting that WestRock would remain fairly quiet in terms of further financial moves. However, the news that WestRock acquired Cenveo’s packaging business on Dec. 10 for $105 million suggests otherwise.
Cenveo’s packaging business had approximately $190 million in sales last year. The company has capabilities in folding carton, shrink sleeve and litho laminated displays. Its markets include food and beverage, tobacco, pharma and nutraceutical.
WestRock is receiving six facilities in the U.S., Canada and Dominican Republic. The transaction is subject to regulatory approval and is expected to close in early 2016.
For Cenveo, its packaging business wasn’t a huge portion of its business. It represented approximately 8% of Cenveo’s $2 billion in annual sales (envelopes are 48%, print 27% and labels 17%). The money will be used to pay down debt and improve cash flow.
For WestRock, adding Cenveo Packaging gives it new capabilities, including cold foil and low migration systems, according to the company. The acquisition also shows that WestRock will expand its operations when opportunities arise.
A year ago, RockTenn and Mead Westvaco were two separate, sizable packaging businesses.
As 2015 opened, RockTenn was the fifth-largest packaging company, with $9.9 billion in sales in 2014; 72% of its sales were in the corrugated market. MWV was the 14th largest, with sales of $5.6 billion, 78% of which were in the consumer packaging segment.
On Jan. 26, 2015, these two companies announced a merger, forming WestRock. Combined, they would have net sales of more than $15 billion, making WestRock the second-largest corrugated and consumer packaging manufacturer, behind International Paper. The transaction closed on July 1, 2015.
One would think it would take a lot of time to merge the operations together, suggesting that WestRock would remain fairly quiet in terms of further financial moves. However, the news that WestRock acquired Cenveo’s packaging business on Dec. 10 for $105 million suggests otherwise.
Cenveo’s packaging business had approximately $190 million in sales last year. The company has capabilities in folding carton, shrink sleeve and litho laminated displays. Its markets include food and beverage, tobacco, pharma and nutraceutical.
WestRock is receiving six facilities in the U.S., Canada and Dominican Republic. The transaction is subject to regulatory approval and is expected to close in early 2016.
For Cenveo, its packaging business wasn’t a huge portion of its business. It represented approximately 8% of Cenveo’s $2 billion in annual sales (envelopes are 48%, print 27% and labels 17%). The money will be used to pay down debt and improve cash flow.
For WestRock, adding Cenveo Packaging gives it new capabilities, including cold foil and low migration systems, according to the company. The acquisition also shows that WestRock will expand its operations when opportunities arise.