SAN FRANCISCO, July 7, 2014 (RISI) -Caraustar's planned acquisition of Newark Group under H.I.G. Capital would combine the second and third largest uncoated recycled paperboard (URB) producers which would rank just below Sonoco in that US industry sector, according to RISI capacity estimates.
Caraustar-Newark would have combined capacity of 866,000 tons per year of URB, with a total of 13 mill locations in nine states that also include other grades, namely gypsum wallboard, coated recycled board (CRB) and recycled containerboard.
The new company would have a 33% share of the URB market, below Sonoco's 35%, according to RISI data, and would be a major tube and core converter. It would have total paperboard capacity of about 1.18 million tons per year, ranking among the fourth or fifth largest such US producers, and larger overall than Sonoco.
Caraustar operates a three-mill complex in Austell, GA, and has other locations in Taylors, SC; Cincinnati; Tama, IA; and Tacoma, WA. Newark Group mills are in Mobile, AL; Fitchburg, MA; Baltimore, OH; Milwaukee; Santa Clara, CA; and Los Angeles.
Caraustar has capacity for wallboard and CRB and Newark makes CRB and recycled containerboard.
Each company collects about two million tons annually of recovered paper furnish at about a dozen locations.
Caraustar's website shows seven folding carton plants as well as numerous other converting plants including tube and core, industrial, protective, and binder products. Newark reports 15 converting plants including tube and core, construction, folding cartons, and graphic boards.
H.I.G. Capital acquired Caraustar in May 2013 for an estimated $470 million from Wayzata Investment Partners. Wayzata had acquired Caraustar out of Chapter 11 in 2009. Newark Group emerged from bankruptcy in 2010 and has been majority owned by DDJ Capital.