January 24, 2017 / 12:22 PM / a year ago

UPDATE 1-Packaging company WestRock to buy smaller rival for $1.39 bln

(Adds details, background)

Jan 24 (Reuters) - Packaging company WestRock Company will buy Multi Packaging Solutions International Ltd for about $1.39 billion to boost its portfolio of products that serve the spirits, confectionary, and cosmetics markets.

The offer price of $18 per share represents a premium of 25 percent to Multi Packaging Solutions’ (MPS) close of $14.39 on Monday.

Norcross, Georgia-based WestRock, the second-largest U.S. packaging company behind International Paper, has entered and exited several investments over the past year, to streamline its portfolio and focus on its core paper and packaging businesses.

On Monday, WestRock sold its business that makes soap dispensers and perfume sprayers for about $1 billion.

The WestRock-MPS deal is the latest in a line of mergers in the packaging industry globally, and several other packaging makers including Dutch packaging maker Schoeller Allibert are currently on the market.

WestRock - which itself was created in 2015 by the $16 billion merger of MeadWestvaco and Rock-Tenn - said its offer for MPS has an enterprise value of $2.28 billion, which includes about $873 million of MPS’s net debt.

WestRock plans to refinance the debt after closing the transaction, expected in the third quarter of fiscal 2017.

PJT Partners served as financial adviser to WestRock, while Lazard advised on some matters related to the deal. BofA Merrill Lynch acted as MPS’ exclusive financial adviser.

Reporting by Rachit Vats and Richa Naidu in Bengaluru; Editing by Sayantani Ghosh

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