Packaging Corporation of America Announces Agreement to Acquire Columbus Container, Inc.

Packaging Corporation of America (NYSE: PKG) today announced that it has entered into a definitive agreement to acquire substantially all of the assets of Columbus Container, Inc., an independent corrugated products producer, in a cash-free, debt-free transaction for a cash purchase price of $100 million. Under the terms of the agreement, PCA will acquire a full-line corrugated products facility located in Columbus, Indiana, five warehousing facilities and other related operations located in Indiana and Illinois. The transaction is structured as a purchase of assets resulting in a full step-up of the assets to fair market value.

Columbus Container, Inc. is a full-service provider of corrugated packaging products utilizing state-of-the-art technologies and design centers to provide customers a solution for nearly any packaging need.

As a result of the acquisition, PCA's containerboard integration level is expected to increase by over 30,000 tons and will allow for further optimization and enhancement of mill capacity. The value of the increased containerboard integration, the expected synergies and the tax benefit of the step-up of assets, plus Columbus Container’s LTM EBITDA, results in a purchase price multiple of approximately 3.3 times EBITDA. The acquisition will be accretive to earnings immediately.

PCA Chairman and CEO Mark Kowlzan said, “Following our acquisition of Timbar, this acquisition will further enhance our operations both geographically and strategically through additional integration and optimization of our warehousing and logistics capabilities.” PCA Executive Vice President, Tom Hassfurther, added “Like previous acquisitions, the addition of Columbus Container is a great strategic fit for PCA. They have in place an excellent management team that leads a highly skilled and dedicated group of employees and have earned an outstanding reputation in the marketplace.”

Closing is subject to certain customary conditions and regulatory approval and is expected in the fourth quarter of 2016. The company expects to finance the transaction with available cash on hand.

PCA is the fourth largest producer of containerboard and corrugated packaging products in the United States and the third largest producer of uncoated freesheet paper in North America. PCA operates eight mills and 95 corrugated products plants and related facilities.

Some of the statements in this press release are forward-looking statements. Forward-looking statements include statements about expected synergies or other benefits from the acquisition, the timing of completion of the acquisition, our future earnings and financial condition, our industry and our business strategy. Statements that contain words such as “ will”, “should”, “anticipate”, “believe”, “expect”, “intend”, “estimate”, “hope” or similar expressions, are forward-looking statements. These forward-looking statements are based on the current expectations of PCA. Because forward-looking statements involve inherent risks and uncertainties, the plans, actions and actual results of PCA could differ materially. Among the factors that could cause plans, actions and results to differ materially from PCA’s current expectations include the following: the impact of general economic conditions; conditions in the paper and packaging industries, including competition, product demand and product pricing; fluctuations in costs; the possibility of unplanned outages or interruptions at our principal facilities; and legislative or regulatory requirements, particularly concerning environmental and tax matters, as well as those identified under Item 1A. Risk Factors in PCA’s Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission and available at the SEC’s website at “www.sec.gov”.

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Packaging Corporation of AmericaBarbara SessionsINVESTOR RELATIONS: [phone]PCA’s Website: www.packagingcorp.com