WestRock to purchase packaging aspect of Cenveo
$105-million deal will involve six operations in the U.S., Canada and Dominican Republic.
December 14, 2015 By Andrew Joseph
STAMFORD, CT—Cenveo, Inc. has announced that its wholly-owned subsidiary, Cenveo Corporation, and certain of its other subsidiaries have entered into a definitive agreement to sell its packaging business to a division of WestRock Company, a leading provider of paper and packaging solutions in consumer and corrugated markets globally.
The sale involves six facilities located in the U.S., Canada and Dominican Republic along with strategic sourcing partnerships in Asia and the Caribbean that provide folded carton, shrink sleeve and lithographic laminated display packaging solutions.
Cenveo chairman and chief executive officer Robert G. Burton, Sr. states: “The agreement brings conclusion to the review process of our Packaging Business which we started in the summer of 2015. The sale allows the company to focus management’s efforts on its core operations, specifically our envelopes, labels, and commercial print segments where we hold leading market positions. The transaction will generate significant cash for the company, an important step in our stated plan to deleverage our balance sheet, improve cash flows, and address certain debt maturities. Additionally, the agreement is expected to provide the company access to one of the leading global packaging companies in the U.S. via a proposed commercial arrangement.”
The cash purchase price for the Cenveo packaging business is approximately $105 million, subject to certain adjustments set forth in the agreement.
The transaction is subject to regulatory approval and is expected to close in early 2016.
WestRock Company is the recent merger of MeadWestvaco Corporation and Rock-Tenn Company, now considered to be one of the world’s largest paper and packaging companies with US$15 billion in annual revenue and 42,000 employees in 30 countries.