(Reuters) -Veritiv on Monday agreed to be bought by private equity firm Clayton, Dubilier & Rice (CD&R) in a $2.3 billion deal that would take the packaging firm private.
The buyout of Veritiv, which makes paper-based boxes and cartons, and glass containers, comes against the backdrop of a recent consolidation in the packaging sector, as firms focus on recyclable packaging materials
Slowing demand has also hit the packaging industry as consumers are cutting down on discretionary spending in the face of higher prices, interest rates and rentals.
Under terms of the deal, CD&R would pay $170 per in cash for each share of Veritiv common stock, representing a nearly 20% premium to its last close.
Shares of Veritiv, which is set to report second-quarter results on Aug. 8, were trading up 18% at $167.20 before the bell.
Morgan Stanley served as exclusive financial advisor to Veritiv for the deal, which is expected to close in the fourth quarter of 2023.
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(Reporting by Kannaki Deka in Bengaluru; Editing by Shailesh Kuber)