Rock-Tenn, Gulf States complete negotiations

Published 12:00 am Wednesday, June 8, 2005

DEMOPOLIS-After a month and half of negotiations Gulf States Paper Corporation has completed the asset sale of its Packaging, Pulp and Paperboard Divisions to Rock Tenn. Monday officials officially announced the sale to the Norcross, Ga. based company were complete.

Mike Case, Rock Tenn’s president and CEO, said his company was excited about their future with the new purchases and looked forward to many productive years.

“Our company management and board of directors is excited about the future and the growth potential for the company,” Case said. “We will be exploring opportunities that will be an extension of our current operations and will look at new activities that are compatible with our core natural resources, wood products and real estate focus.”

The sale, which was first announced on April 28, included 13 facilities in eight states. As part of the sale around 26 Gulf States associates at the company’s headquarters have received offers from Rock-Tenn and will work in a leased space at Gulf States headquarters.

As a result of the acquisition, Rock-Tenn will become the second largest folding carton producer in North America with leading positions in recycled and bleached paperboard. Rock-Tenn has estimated it will realize additional annual operation synergies, both at the facilities and headquarters of approximately $6 million over the two years following the acquisition.

Gulf States locations in Alabama included in the sale were the Demopolis Pulp and Paperboard mill, which employs 450, the Livingston Box Company, which employs 50 and the Rooster Bridge Chip Mill also located in Sumter County with 25 employees.

Other locations included will be three North Carolina based Paperboard Packaging and Resolution Packaging plants and three other Paperboard and Packaging plants out of Missouri, Kentucky and Texas. Three GSD Packaging plants from California, Georgia and Pennsylvania will also be a part of the agreement.

As for Gulf States, company spokesperson Dan Meissner said they were working to accommodate Rock-Tenn as much as they could.

“There is a lot of changeover work to be done,” Meissner said. “Rock-Tenn is leasing office space in our facility for the time being.”

After all the changes are complete Meissner said Gulf States would retain a number of employees to work their interests that were not included in the sale.

“We will have about 75 associates at our headquarters in Tuscaloosa and several hundred more spread among our forestry district offices, Moundville sawmill and recreational facilities,” Meissner said. “Going forward, we will focus our attention around these operations and look forward toward enhancing the company’s business portfolio in areas more closely related to our natural resource roots.”