Business News

Kapstone Enters Into New Senior Credit Agreement for Acquisition of Charleston Division

Friday 13. June 2008 - KapStone Paper and Packaging Corporation (NASDAQ:KPPC) today announced that it has entered into a senior secured credit agreement for an aggregate of up to $555 million with Bank of America, N.A., as administrative agent.

The credit facility evidenced by the credit agreement was successfully syndicated to over 15 other financial institutions. Proceeds from the credit facility, together with cash on hand, are expected to be used to pay for KapStone’s purchase of the North Charleston Kraft Division (the “Charleston Division”) from MeadWestvaco Corporation including related transaction fees, to repay KapStone’s existing credit facility balance, and to provide for KapStone’s working capital requirements. The funding under the credit agreement is subject to certain closing conditions, including the simultaneous closing of the acquisition of the Charleston Division, which is expected to occur in the third quarter of this year.

KapStone’s CEO, Roger Stone, said, “Successfully securing this credit facility in today’s difficult credit markets is strong affirmation of the strength that the Charleston acquisition will bring to KapStone. The transaction is continuing to progress as we anticipated, and we look forward to closing on the acquisition in the third quarter.”