Welcome to The Business Buying Academy with Sieva Kozinsky.

🔑 160 years to roll-up the world's most boring industry

I love talking about the world's most boring business rollups.

It doesn't get more boring than this one.

Packaging Corporation of America is a $20 billion publicly-traded company that's been around for nearly 160 years - and you've probably never heard of it.

The generic name alone could put some people to sleep.

But the rollup strategy is one that business history nerds like myself love.

PCA’s story began in 1867 when entrepreneur Henry Weis founded the North Star Mill in Quincy, Illinois to produce paper.

The perfect timing to start a business like this.

In the post-Civil War boom, demand for paper exploded; consumers demanded newspapers and books, while businesses needed paper to run their businesses on.

Weis' margins were solid.

He sourced cheap raw materials (first wild grass, then later straw) and turned them into a product with nearly unlimited demand.

The paper mill quietly produced paper products for decades.

The business grew as people continued moving out to the Midwest.

Then a few key competitors emerged. The Ohio Boxboard Company and the American Box Board Company specialized in making cardboard containers starting in the early 1900s.

We'll get back to those two companies in a moment.

But as the North Star Mill continued to operate, a new era emerged in corporate America:

The age of the corporate merger.

North Star combined with several other independent mills.

In a commodity business, consolidation to cut costs became the obvious strategy.

Central Fiber Products Company formed in 1931 through the consolidation of North Star Mill, North Star Egg Case Company, and several other paper companies.

Nearly 30 years later, the industry consolidated once again.

On July 31, 1959: Central Fiber Products, American Box Board, and Ohio Boxboard merged to form Packaging Corporation of America.

“By forming PCA, the merger instantly created a major force in the paperboard and packaging industry. The combined company brought together under one corporate umbrella a network of more than 50 plants and 7,000 employees, with facilities sprawling from the East Coast out to the Rockies. Within the first few years of PCA’s existence, it was the sixth largest paperboard producer, the fourth largest maker of cartons or folding boxes, and the tenth largest manufacturer of corrugated containerboard in the United States. One of its facilities, a plant located in Rittman, Ohio, was the largest integrated carton factory in the world.”
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- Funding Universe

The new entity started with annual sales exceeding $140 million and a network of mills and plants positioned to meet demand for another post-war boom, similar to the one the North Star Mill started within.

The packaging industry was on the precipitous of another huge catalyst for the industry:

Just three years after the PCA merger, a company called Walmart started up in Arkansas.

The emergence of Walmart and the concept of big box stores created a boom for cardboard manufacturers for decades.

But the story of this roll-up isn't fast growth.

It's the opposite.

The story of PCA growing is told over nearly 160 years, from 1867 until today.

The company started with one mill and slowly grew it over 60 years before turning to M&A for new growth.

Then, the business only expanded to new regions once it had maxed out existing territories.

When raw materials became the bottleneck, PCA vertically integrated and purchased timber companies.

In 1991, PCA made major moves by purchasing two containerboard mills, 19 corrugated container plants, and cutting rights to approximately 650,000 acres of timberlands from Georgia-Pacific.

This dramatically expanded operations.

The Acquisition Playbook

PCA has used targeted acquisitions to fill geographic gaps and add capacity. While rarely headline-grabbing, these deals have compounded PCA into a $9 billion/year business.

Key modern acquisitions include:

• 2013: Acquisition of Boise Inc. - deal added significant containerboard and paper operations.
• 2016: TimBar Corporation ($386 million) - six corrugated production facilities; and Columbus Container ($100 million).
• 2017: Sacramento Container Corporation assets, Northern Sheets, and Central California Sheets ($265 million) - boosting West Coast presence.
• Earlier notable buys: Acorn Corrugated Box Company (2004, ~$45 million in annual sales) and others like Deseret Container (1990).

PCA operates 9 containerboard mills and ~95 converting facilities. It employs approximately 15,400 people.

PCA revenue by decade:

• 1960: $138 million
• 1970: ~$220 million (estimated as PCA was acquired and included in Tenneco's consolidated financials)
• 1980: ~$500 million (estimated)
• 1990: ~1.2 billion
• 2000: $1.92 billion (PCA spun out from Tenneco)
• 2010: $2.43 billion
• 2020: $6.65 billion
• 2025: $8.98 billion

PCA exemplifies the old-school industrial roll-up: patient consolidation of regional players, vertical integration (mills + converting + timber), and opportunistic buys during industry cycles.

Sieva

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