S-4/A 1 tv489751-s4a.htm AMENDMENT NO. 1 TO FORM S-4 tv489751-s4a - block - 19.0437s
As filed with the Securities and Exchange Commission on June 28, 2018
Registration No. 333-223964​
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
WHISKEY HOLDCO, INC.
(Exact name of registrant as specified in its charter)
Delaware
2650
37-1880617
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification No.)
c/o WestRock Company
1000 Abernathy Road NE
Atlanta, GA 30328
(770) 448-2193
(Name, address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Robert B. McIntosh
Executive Vice President, General
Counsel and Secretary
Whiskey Holdco, Inc.
c/o WestRock Company
1000 Abernathy Road NE
Atlanta, GA 30328
(770) 448-2193
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Robert B. McIntosh
Executive Vice President,
General Counsel and Secretary
WestRock Company
1000 Abernathy Road NE
Atlanta, GA 30328
(770) 448-2193
Kathryn D. Ingraham
Vice President, Secretary and
General Counsel
KapStone Paper and Packaging Corporation
1101 Skokie Boulevard, Suite 300
Northbrook, IL 60062
(847) 239-8800
Richard Hall, Esq.
Andrew C. Elken, Esq.
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
(212) 474-1000
Kevin F. Blatchford, Esq.
Scott R. Williams, Esq.
Jonathan A. Blackburn, Esq.
Sidley Austin LLP
One South Dearborn Street
Chicago, IL 60603
(312) 853-7000
Approximate date of commencement of the proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective and upon completion of the mergers described in the enclosed document.
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of  “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Emerging growth company ☐
Non-accelerated filer ☒ (Do not check if a smaller reporting company)
Smaller reporting company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:
Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☐
Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such dates as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this proxy statement/prospectus is not complete and may be changed. The registrant may not sell the securities offered by this proxy statement/prospectus until the registration statement filed with the Securities and Exchange Commission, of which the proxy statement/prospectus is a part, is declared effective. This proxy statement/prospectus is not an offer to sell and is not soliciting an offer to buy any securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY — SUBJECT TO COMPLETION — DATED JUNE 28, 2018
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MERGERS PROPOSED — YOUR VOTE IS VERY IMPORTANT
To Stockholders of KapStone Paper and Packaging Corporation:
WestRock Company, a Delaware corporation (referred to as WestRock), KapStone Paper and Packaging Corporation, a Delaware corporation (referred to as KapStone), Whiskey Holdco, Inc., a Delaware corporation (referred to as Holdco), Whiskey Merger Sub, Inc., a Delaware corporation (referred to as WestRock Merger Sub), and Kola Merger Sub, Inc., a Delaware corporation (referred to as KapStone Merger Sub), have entered into an Agreement and Plan of Merger, dated as of January 28, 2018, as it may be amended from time to time (referred to as the merger agreement). Pursuant to the merger agreement and subject to its terms and conditions, WestRock will acquire all of the outstanding shares of KapStone through a transaction in which: (i) WestRock Merger Sub will merge with and into WestRock, with WestRock surviving such merger as a wholly owned subsidiary of Holdco (referred to as the WestRock merger) and (ii) KapStone Merger Sub will merge with and into KapStone, with KapStone surviving such merger as a wholly owned subsidiary of Holdco (referred to as the KapStone merger and, together with the WestRock merger, referred to as the mergers). We believe that the mergers will benefit the stockholders of KapStone and we ask for your support in voting for the KapStone merger proposal at KapStone’s special meeting.
If the mergers are completed, each share of KapStone common stock (referred to as a KapStone share) issued and outstanding immediately prior to the effective time of the mergers (referred to as the effective time) (excluding KapStone shares owned by any direct or indirect wholly owned subsidiary of KapStone, KapStone shares that are owned by KapStone as treasury shares or in respect of which a KapStone stockholder has perfected appraisal rights under Section 262 of the General Corporation Law of the State of Delaware) will be converted into the right to receive, at the election of the KapStone stockholder either: (i) $35.00 in cash, without interest thereon, or (ii) 0.4981 shares of Holdco common stock; subject to proration procedures designed to ensure that shares of Holdco common stock are received in respect of no more than 25% of the KapStone shares issued and outstanding immediately prior to the effective time. WestRock common stock is currently traded on the New York Stock Exchange (referred to as the NYSE) under the symbol “WRK” and KapStone common stock is currently traded on the NYSE under the symbol “KS”. We expect that Holdco common stock will be listed on the NYSE under the symbol “WRK”. We urge you to obtain current market quotations of WestRock common stock and KapStone common stock.
At the KapStone special meeting, KapStone stockholders will be asked to consider and vote on (i) a proposal to adopt the merger agreement (referred to as the KapStone merger proposal), (ii) a proposal to adjourn the KapStone special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve the KapStone merger proposal and (iii) a non-binding, advisory proposal to approve the compensation and benefits that may be paid, become payable or be provided to KapStone’s named executive officers in connection with the mergers. The KapStone board of directors unanimously recommends that KapStone stockholders vote “FOR” each of these proposals to be considered at the KapStone special meeting.
The mergers cannot be completed unless the KapStone stockholders approve the KapStone merger proposal. Your vote is very important, regardless of the number of shares you own. Whether or not you plan to attend the KapStone special meeting, please promptly mark, sign and date the accompanying proxy card and return it promptly in the enclosed postage-paid envelope, or authorize the individuals named on your proxy card to vote your shares by calling the toll-free telephone number or by logging on to the Internet website specified in the instructions included with your proxy card.
The obligations of WestRock and KapStone to complete the mergers are subject to the satisfaction or waiver of several conditions set forth in the merger agreement. More information about WestRock, KapStone, Holdco and the mergers is contained in this proxy statement/prospectus. WestRock and KapStone encourage you to read this entire proxy statement/prospectus carefully, including the section entitled “Risk Factors”, beginning on page 32.
We look forward to the successful combination of WestRock and KapStone.
Sincerely,
Roger W. Stone
Executive Chairman of the Board of Directors
KapStone Paper and Packaging Corporation
Matthew Kaplan
President and Chief Executive Officer
KapStone Paper and Packaging Corporation
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under this proxy statement/prospectus or determined that this proxy statement/prospectus is accurate or complete. Any representation to the contrary is a criminal offense.
This proxy statement/prospectus is dated [           ], 2018 and is first being mailed to the stockholders of KapStone on or about [           ], 2018.

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KapStone Paper and Packaging Corporation
1101 Skokie Boulevard, Suite 300
Northbrook, IL 60062
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be held on [           ], 2018
TIME:
[    ] (local time) on [           ], 2018
PLACE:
KapStone Paper and Packaging Corporation Corporate Headquarters
1101 Skokie Boulevard, Suite 300
Northbrook, IL 60062
ITEMS OF BUSINESS:

To consider and vote on a proposal to adopt the Agreement and Plan of Merger, dated as of January 28, 2018, as it may be amended from time to time (referred to as the merger agreement), among WestRock Company, a Delaware corporation (referred to as WestRock), KapStone Paper and Packaging Corporation, a Delaware corporation (referred to as KapStone), Whiskey Holdco, Inc., a Delaware corporation and a wholly owned subsidiary of WestRock (referred to as Holdco), Whiskey Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Holdco, and Kola Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Holdco, a copy of which is attached as Annex A to the proxy statement/prospectus accompanying this notice (referred to as the KapStone merger proposal);

To consider and vote on a proposal to adjourn the KapStone special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve the KapStone merger proposal (referred to as the KapStone adjournment proposal); and

To consider and vote on a non-binding, advisory proposal to approve the compensation and benefits that may be paid, become payable or be provided to KapStone’s named executive officers in connection with the mergers (referred to as the KapStone compensation proposal).
The accompanying proxy statement/prospectus, including the annexes, contains further information with respect to the business to be transacted at the KapStone special meeting. We urge you to read the proxy statement/prospectus, including the annexes and any documents incorporated by reference, carefully and in their entirety. KapStone will transact no other business at the KapStone special meeting, except such other business as may properly be brought before the KapStone special meeting or any adjournments or postponements thereof. Please refer to the proxy statement/prospectus of which this notice forms a part for further information with respect to the business to be transacted at the KapStone special meeting.
BOARD OF DIRECTORS’ RECOMMENDATION:
After careful consideration, the KapStone board of directors, on January 28, 2018, unanimously approved and adopted the merger agreement and the transactions contemplated thereby, on the terms and subject to the conditions set forth therein, including the KapStone merger, determined that the terms of the merger agreement are in the best interests of KapStone and its stockholders, declared the merger agreement advisable and resolved to recommend that KapStone stockholders approve the KapStone merger proposal and approve the KapStone compensation proposal.
The KapStone board of directors unanimously recommends that KapStone stockholders vote “FOR” each of the KapStone merger proposal, the KapStone adjournment proposal and the KapStone compensation proposal.

WHO MAY VOTE:
Only holders of record of KapStone common stock as of the close of business on [           ], 2018 (referred to as the record date) are entitled to receive notice of the KapStone special meeting and to vote at the KapStone special meeting or any adjournments or postponements thereof. As of the record date, there were [    ] shares of KapStone common stock outstanding. Each share of KapStone common stock is entitled to one vote on each matter properly brought before the KapStone special meeting. A list of stockholders of record entitled to vote at the KapStone special meeting will be available at the executive offices of KapStone at 1101 Skokie Boulevard, Suite 300, Northbrook, Illinois 60062 and will also be available for inspection at the KapStone special meeting.
Concurrently with the execution of the merger agreement on January 28, 2018, as inducement for WestRock to enter into the merger agreement, WestRock entered into separate voting agreements (each referred to as a voting agreement and collectively, the voting agreements) with each of Mr. Roger Stone, Mr. Matthew Kaplan, the Roger W. Stone Revocable Trust and the Roger and Susan Stone Family Foundation, which together owned shares totaling approximately 9.5% of the shares of KapStone common stock issued and outstanding as of January 28, 2018. Pursuant to the voting agreements, each such stockholder agreed during the term of its respective voting agreement to, among other things, upon the terms and subject to the terms and conditions therein, (i) vote all of its shares of KapStone common stock in favor of the adoption of the merger agreement and in favor of the mergers and the other transactions contemplated by the merger agreement, and against, among other things, any alternative transaction that may be proposed, (ii) not solicit alternative transactions or participate in discussions or negotiations regarding alternative transactions, in each case, subject to certain exceptions, and (iii) subject to certain exceptions, not sell or otherwise transfer its shares of KapStone common stock.
VOTE REQUIRED FOR APPROVAL:
Your vote is very important. We cannot complete the mergers without the approval of the KapStone merger proposal. Assuming a quorum is present, the approval of the KapStone merger proposal requires the affirmative vote of the holders of a majority of all issued and outstanding shares of the KapStone common stock entitled to vote on the KapStone merger proposal. Assuming a quorum is present, approval of the KapStone adjournment proposal requires the affirmative vote of a majority of the votes present in person or represented by proxy at the KapStone special meeting and entitled to vote thereon. Assuming a quorum is present, approval of the KapStone compensation proposal requires the affirmative vote of holders of a majority of the shares of KapStone common stock present in person or represented by proxy at the KapStone special meeting and entitled to vote thereon.
Whether or not you plan to attend the KapStone special meeting, please promptly mark, sign and date the accompanying proxy card and return it in the enclosed postage-paid envelope, or authorize the individuals named on your proxy card to vote your shares by calling the toll-free telephone number or by logging on to the Internet website specified in the instructions included with your proxy card. If your shares are held in the name of a broker or other nominee, please follow the instructions on a voting instruction card furnished by the record holder.
By order of the Board of Directors,
Kathryn D. Ingraham
Vice President, Secretary and General Counsel
Northbrook, Illinois
[           ], 2018

ADDITIONAL INFORMATION
This proxy statement/prospectus incorporates important business and financial information about KapStone and WestRock from other documents that are not included in or delivered with this proxy statement/prospectus. This information is available to you without charge upon your request. You can obtain the documents incorporated by reference into this proxy statement/prospectus by requesting them in writing or by telephone from the appropriate company at the following addresses and telephone numbers:
KapStone Paper and Packaging Corporation
1101 Skokie Boulevard, Suite 300
Northbrook, IL 60062
Attn: Corporate Secretary
(847) 239-8800
WestRock Company
1000 Abernathy Road NE
Atlanta, GA 30328
Attn: Corporate Secretary
(770) 448-2193
Investors may also consult KapStone’s or WestRock’s website for more information concerning the mergers described in this proxy statement/prospectus. KapStone’s website is www.kapstonepaper.com. WestRock’s website is www.westrock.com. Information included on either of these websites is not incorporated by reference into this proxy statement/prospectus.
If you would like to request any documents, please do so by [           ], 2018 in order to receive them before the KapStone special meeting.
For more information, see the section entitled “Where You Can Find More Information”, beginning on page 155.
ABOUT THIS PROXY STATEMENT/PROSPECTUS
This proxy statement/prospectus, which forms part of a Registration Statement on Form S-4 filed with the U.S. Securities and Exchange Commission (referred to as the SEC) by Whiskey Holdco, Inc. (referred to as Holdco) (File No. 333-223964) constitutes a prospectus of Holdco under Section 5 of the Securities Act of 1933, as amended (referred to as the Securities Act), with respect to the Holdco shares to be issued in connection with the KapStone merger pursuant to the merger agreement. This proxy statement/prospectus also constitutes a proxy statement under Section 14(a) of the Securities Exchange Act of 1934, as amended (referred to as the Exchange Act). It also constitutes a notice of meeting with respect to the KapStone special meeting.
You should rely only on the information contained in or incorporated by reference into this proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this proxy statement/prospectus. This proxy statement/​prospectus is dated [           ], 2018. You should not assume that the information contained in, or incorporated by reference into, this proxy statement/prospectus is accurate as of any date other than that date. Neither our mailing of this proxy statement/prospectus to KapStone stockholders, nor the issuance by Holdco of its common stock in connection with the mergers, will create any implication to the contrary.
This proxy statement/prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, or the solicitation of a proxy, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction. Information contained in this proxy statement/​prospectus regarding WestRock has been provided by WestRock and information contained in this proxy statement/prospectus regarding KapStone has been provided by KapStone.

Unless otherwise indicated or as the context otherwise requires, all references in this proxy statement/​prospectus to:

“combined company” refer collectively to Holdco, WestRock and KapStone, following completion of the mergers;

“Holdco” refer to Whiskey Holdco, Inc., a Delaware corporation and a wholly owned subsidiary of WestRock;

“Holdco shares” refer to shares of common stock of Holdco, par value $0.01 per share;

“KapStone” refer to KapStone Paper and Packaging Corporation, a Delaware corporation;

“KapStone merger” refer to the merger of KapStone Merger Sub with and into KapStone, with KapStone surviving such merger as a wholly owned subsidiary of Holdco;

“KapStone Merger Sub” refer to Kola Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Holdco;

“KapStone shares” refer to shares of common stock of KapStone, par value $0.0001 per share;

“KapStone stockholders” refer to holders of KapStone shares;

“merger agreement” refer to the Agreement and Plan of Merger, dated as of January 28, 2018, as it may be amended from time to time, among WestRock, KapStone, Holdco, WestRock Merger Sub and KapStone Merger Sub, a copy of which is attached as Annex A to this proxy statement/​prospectus and is incorporated herein by reference;

“mergers” refer collectively to the WestRock merger and the KapStone merger;

“we”, “our” and “us” refer to WestRock and KapStone, collectively;

“WestRock” refer to WestRock Company, a Delaware corporation;

“WestRock shares” refer to shares of common stock of WestRock, par value $0.01 per share;

“WestRock merger” refer to the merger of WestRock Merger Sub with and into WestRock, with WestRock surviving such merger as a wholly owned subsidiary of Holdco; and

“WestRock Merger Sub” refer to Whiskey Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Holdco.

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QUESTIONS AND ANSWERS
The following are some questions that you, as a KapStone stockholder, may have regarding the mergers and the other matters being considered at the KapStone special meeting and the answers to those questions. You are urged to read carefully the remainder of this proxy statement/prospectus because the information in this section does not provide all the information that might be important to you with respect to the mergers and the other matters being considered at the KapStone special meeting. Additional important information is also contained in the annexes to and the documents incorporated by reference into this proxy statement/prospectus.
About the Mergers
Q:
What is the proposed transaction on which I am being asked to vote?
A:
WestRock, KapStone, Holdco, KapStone Merger Sub and WestRock Merger Sub have entered into the merger agreement that is described in this proxy statement/prospectus, and a copy of which is attached as Annex A. Pursuant to the merger agreement and subject to its terms and conditions, WestRock will acquire all of the outstanding shares of KapStone through a transaction in which: (i) WestRock Merger Sub will merge with and into WestRock, with WestRock surviving such merger as a wholly owned subsidiary of Holdco, and (ii) KapStone Merger Sub will merge with and into KapStone, with KapStone surviving such merger as a wholly owned subsidiary of Holdco. As a result, among other things, (a) Holdco will become the ultimate parent of WestRock, KapStone and their respective subsidiaries, (b) existing WestRock shares will automatically convert into Holdco shares and (c) existing KapStone stockholders will receive Holdco shares or cash, as described further below, in each case in accordance with the terms of the merger agreement. It is a condition to the completion of the mergers that the Holdco shares to be issued in connection with the mergers be authorized for listing on the New York Stock Exchange (referred to as the NYSE), subject to official notice of issuance. Following the completion of the mergers, Holdco will cause KapStone shares to be delisted from the NYSE and deregistered under the Exchange Act.
Q:
Why am I receiving this proxy statement/prospectus?
A:
You are receiving this proxy statement/prospectus because you were a holder of record of KapStone shares as of the close of business on [           ], 2018 (referred to as the record date).
This proxy statement/prospectus serves as the proxy statement through which KapStone will solicit proxies to obtain the necessary KapStone stockholder approval of the KapStone merger proposal (as defined below) (such approval referred to as the KapStone stockholder approval). It also serves as the prospectus pursuant to which Holdco will issue Holdco shares as consideration in the KapStone merger.
KapStone is holding a special meeting of stockholders (referred to as the KapStone special meeting) in order to obtain the stockholder approval necessary to adopt the merger agreement. KapStone stockholders will also be asked to approve the adjournment of the KapStone special meeting (if necessary or appropriate to solicit additional proxies if there are not sufficient votes to adopt the merger agreement) and to vote on a non-binding, advisory proposal to approve the compensation and benefits that may be paid, become payable or be provided to KapStone’s named executive officers in connection with the mergers.
We will be unable to complete the mergers unless, among other things, the KapStone stockholders vote to adopt the merger agreement.
This proxy statement/prospectus contains important information about the mergers, the merger agreement and the KapStone special meeting. You should read this information carefully and in its entirety. The enclosed voting materials allow you to vote your shares without attending the KapStone special meeting.
1

Q:
What will KapStone stockholders receive in the mergers?
A:
If the mergers are completed, KapStone stockholders will have the right to elect to receive with respect to each KapStone share they hold (other than KapStone shares in respect of which a KapStone stockholder has properly demanded appraisal rights in accordance with the General Corporation Law of the State of Delaware (referred to as the DGCL)), subject to certain proration procedures described below, either: (i) $35.00 in cash, without interest thereon (referred to as the KapStone cash consideration), or (ii) 0.4981 Holdco shares (referred to as the KapStone stock consideration, and, together with the KapStone cash consideration, referred to as the KapStone merger consideration). KapStone stockholders will not receive any fractional Holdco shares in the KapStone merger. Instead, KapStone stockholders will receive cash in lieu of any fractional Holdco shares that they would otherwise have been entitled to receive.
Q:
What ownership percentage of Holdco will former KapStone stockholders have after the mergers are completed?
A:
If the mergers are completed and the maximum stock amount is issued to KapStone stockholders, assuming 100.3 million KapStone shares are issued and outstanding immediately prior to the effective time and 256.5 million WestRock shares are issued and outstanding immediately prior to the effective time, approximately 4.6% of the issued and outstanding Holdco shares immediately following the effective time of the mergers will be held by former KapStone stockholders. For information regarding the risk associated with a reduced ownership in the combined company, see “Risk Factors — Risks Related to the Mergers — KapStone stockholders will have a reduced ownership and voting interest after the mergers and will exercise less influence over management”, beginning on page 36.
Q:
Are KapStone stockholders guaranteed to receive the stock consideration if they elect to receive stock consideration for their KapStone shares?
A:
No. The maximum number of Holdco shares that may be issued to KapStone stockholders as KapStone stock consideration (referred to as the maximum stock amount) is equal to (i) 25% of the product of  (A) 0.4981 and (B) the number of issued and outstanding KapStone shares immediately prior to the effective time of the mergers (referred to as the effective time), (ii) rounded down to the nearest whole number. Accordingly, depending on the elections made by other KapStone stockholders, if a KapStone stockholder elects to receive the KapStone stock consideration, such holder may not receive the KapStone stock consideration in respect of such stock election shares (as defined below). The greater the oversubscription of the stock election (as defined below), the fewer Holdco shares and more cash a KapStone stockholder making a stock election will receive in respect of its stock election shares. For further information, including the potential effects of the proration procedures on what a hypothetical holder of 100 KapStone shares would receive if such holder elected to receive the KapStone stock consideration for all of its KapStone shares, see the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger Agreement — Effects of the Mergers; Closing; Effective Time”, beginning on page 98.
Q:
How do I make my stock election if I am a KapStone stockholder?
A:
Under the merger agreement, the KapStone stockholders are required to make an election to receive KapStone stock consideration (referred to as a stock election) by 5:00 p.m. New York City time on [           ], 2018, the business day immediately prior to the KapStone special meeting (referred to as the election deadline). Concurrently with the mailing of this proxy statement/prospectus, an election form will be mailed to each holder of record of KapStone shares for the KapStone special meeting. KapStone will make available one or more election forms as may be reasonably requested from time to time by all persons who become holders of record of KapStone shares during the period following the record date and prior to the election deadline. To elect to receive Holdco shares, you must indicate on the election form the number of KapStone shares with respect to which you elect to receive the KapStone stock consideration (such KapStone shares referred to as stock election shares). You must return your properly completed and signed form accompanied by the KapStone share certificate or an appropriate customary guarantee of delivery by the election deadline. KapStone and WestRock will
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publicly announce by press release the election deadline at least three business days prior to the anticipated election deadline, but you are encouraged to return your election form as promptly as practicable. If you hold your KapStone shares through a bank, broker or other nominee, you should follow the instructions provided by such bank, broker or other nominee to ensure that your election instructions are timely returned. For further information, see the section entitled “The KapStone Special Meeting”, beginning on page 43. All KapStone shares for which no stock election is made (referred to as no election shares) will be converted into the right to receive KapStone cash consideration.
Q:
Can I revoke or change my stock election after I mail my election form?
A:
Yes. Any election form may be revoked with respect to all or a portion of the KapStone shares subject thereto by the stockholder who submitted the applicable election form by written notice received by the exchange agent prior to the election deadline. If an election form is revoked, the KapStone shares as to which such stock election previously applied will be no election shares unless a stock election is subsequently submitted by the stockholder prior to the election deadline. For more information, see the section entitled “The KapStone Special Meeting — Revocability of Proxies and Changes to a KapStone Stockholder’s Vote”, beginning on page 45.
Q:
What happens if I do not make a stock election or my election form is not received before the election deadline?
A:
If a KapStone stockholder makes no stock election with respect to any of its KapStone shares or the exchange agent does not receive a properly completed and signed election form by the election deadline and such KapStone stockholder does not properly demand appraisal in accordance with the DGCL, it will receive the KapStone cash consideration in respect of such shares. In no event will a KapStone stockholder making no stock election with respect to its KapStone shares receive the KapStone stock consideration in respect of any of its KapStone shares. For more information, see the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger Agreement — Effect on the Capital Stock”, beginning on page 100.
Q:
How do I calculate the value of the KapStone stock consideration?
A:
The merger agreement does not contain any provision that would adjust the exchange ratio based on fluctuations in the market value of either KapStone shares or WestRock shares. Because of this, the implied value of the KapStone stock consideration will fluctuate between now and the completion of the mergers. The value of the KapStone stock consideration depends on the market value of Holdco shares at the time the mergers are completed, which will in turn be affected by the market value of KapStone shares and WestRock shares at the time the mergers are completed.
On January 26, 2018, the last trading day prior to the public announcement of the proposed mergers, the closing price on the NYSE was $26.54 per KapStone share and $70.27 per WestRock share. On [           ], 2018, the latest practicable date before the date of this proxy statement/prospectus, the closing price on the NYSE was $[    ] per KapStone share and $[    ] per WestRock share. We urge you to obtain current market quotations before voting your shares.
Q:
Should I send in my share certificates now for the exchange?
A:
No. KapStone stockholders should keep any share certificates they hold at this time. If a KapStone stockholder intends to make a stock election for the KapStone stock consideration, it must send in any KapStone share certificates it holds at the time it sends in the election form (or an appropriate customary guarantee of delivery in lieu thereof). As promptly as reasonably practicable after the effective time (and in any event within three business days after the effective time), WestRock will cause the exchange agent to mail to each holder of record of KapStone shares represented by certificates or book-entry shares not held through DTC whose shares are converted into the right to receive the KapStone merger consideration pursuant to the merger agreement a form of letter of transmittal, together with instructions thereto advising such holder of the effectiveness of the KapStone merger and the conversion of KapStone shares into the right to receive the KapStone merger consideration.
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With respect to book-entry shares held through DTC, WestRock and KapStone will cooperate to establish procedures regarding transmitting the applicable merger consideration and any dividends or distributions to which the beneficial owners thereof are entitled pursuant to the merger agreement.
Q:
Who is the exchange agent for the mergers?
A:
Computershare Trust Company, N.A. is the exchange agent.
Q:
When do you expect the mergers to be completed?
A:
We are currently targeting completion of the mergers by the end of the quarter ending September 30, 2018 or during the following quarter, subject to the required KapStone stockholder approval and regulatory clearances and the satisfaction or waiver of the other closing conditions. It is possible that factors outside the control of KapStone or WestRock could result in the mergers being completed at a later time, or not at all.
Q:
Will I still be paid dividends prior to the mergers?
A:
KapStone most recently paid a quarterly dividend of  $0.10 per share to its stockholders. Under the merger agreement, KapStone may, without WestRock’s consent, continue to declare and pay its regular quarterly cash dividend in an amount of up to $0.10 per share. KapStone has declared a regular quarterly dividend of  $0.10 per share, which is payable on April 11, 2018 to stockholders of record as of March 28, 2018.
Q:
Are there any risks in the mergers that I should consider?
A:
Yes. There are risks associated with all business combinations, including the WestRock merger and KapStone merger. These risks are discussed in more detail in the section entitled “Risk Factors”, beginning on page 32.
Q:
Are KapStone stockholders entitled to appraisal rights?
A:
Yes. If the KapStone merger is completed, KapStone stockholders who have complied exactly with the applicable requirements and procedures of Section 262 of the DGCL will be entitled to demand appraisal of their KapStone shares and receive in lieu of the KapStone merger consideration a cash payment equal to the “fair value” of their KapStone shares. For more information, see the section entitled “Proposal 1: Adoption of the Merger Agreement — Appraisal Rights”, beginning on page 91.
Q:
What is householding and how does it affect me?
A:
The SEC permits KapStone to deliver a single copy of its proxy statements and annual reports to KapStone stockholders who have the same address and last name, unless KapStone has received contrary instructions from such KapStone stockholders. Each KapStone stockholder will continue to receive a separate proxy card. This procedure, called “householding”, will reduce the volume of duplicate information KapStone stockholders receive and reduce KapStone’s printing and postage costs. KapStone will promptly deliver a separate copy of this proxy statement/prospectus to any such KapStone stockholder upon written or oral request. A stockholder wishing to receive a separate proxy statement/prospectus can notify KapStone at KapStone Paper and Packaging Corporation, 1101 Skokie Boulevard, Suite 300, Northbrook, IL 60062, telephone: 847-239-8800. Similarly, KapStone stockholders currently receiving multiple copies of these documents can request the elimination of duplicate documents by contacting KapStone as described above.
About the KapStone Special Meeting
Q:
When and where will the KapStone special meeting be held?
A:
The KapStone special meeting is scheduled to be held at KapStone Corporate Headquarters, 1101 Skokie Boulevard, Suite 300, Northbrook, Illinois 60062, on [           ], 2018 at [    ] local time.
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Q:
Who is entitled to vote at the KapStone special meeting?
A:
Only holders of record of KapStone shares at the close of business on the record date are entitled to notice of, and to vote at, the KapStone special meeting and at any adjournment of the KapStone special meeting.
Q:
How can I attend the KapStone special meeting?
A:
All KapStone stockholders are invited to attend the KapStone special meeting. You may be asked to present valid photo identification, such as a driver’s license or passport, before being admitted to the KapStone special meeting. If you hold your KapStone shares in “street name”, you also may be asked to present proof of ownership to be admitted to the KapStone special meeting. A brokerage statement or letter from your broker, bank, trust company or other nominee proving ownership of the shares on the record date are examples of proof of ownership. To help KapStone plan for the KapStone special meeting, please indicate whether you expect to attend by responding affirmatively when prompted during Internet or telephone proxy submission or by following the instructions included on your proxy card.
Q:
What proposals will be considered at the KapStone special meeting?
A:
At the KapStone special meeting, KapStone stockholders will be asked:

to consider and vote on a proposal to adopt the merger agreement, a copy of which is attached as Annex A to the proxy statement/prospectus accompanying this notice (referred to as the KapStone merger proposal);

to consider and vote on a proposal to adjourn the KapStone special meeting, if necessary or appropriate, to solicit additional proxies if there are not sufficient votes to approve the KapStone merger proposal (referred to as the KapStone adjournment proposal); and

to consider and vote on a non-binding, advisory proposal to approve the compensation and benefits that may be paid, become payable or be provided to KapStone’s named executive officers in connection with the mergers (referred to as the KapStone compensation proposal).
KapStone will transact no other business at its special meeting, except such other business as may properly be brought before the KapStone special meeting or any adjournments or postponements thereof.
Q:
How does the KapStone board of directors recommend that I vote?
A:
The KapStone board of directors (referred to as the KapStone board), on January 28, 2018, unanimously approved and adopted the merger agreement and the transactions contemplated thereby, on the terms and subject to the conditions set forth therein, including the KapStone merger, and determined that the terms of the merger agreement are in the best interests of KapStone and its stockholders and declared the merger agreement advisable. The KapStone board unanimously recommends that KapStone stockholders vote “FOR” each of the KapStone merger proposal, the KapStone adjournment proposal and the KapStone compensation proposal.
Q:
How do I vote?
A:
If you are a holder of record of KapStone shares as of the close of business on the record date, you may vote in person by attending the KapStone special meeting or, to ensure your shares are represented at the KapStone special meeting, you may vote by:

marking, signing and dating the accompanying proxy card and returning it in the enclosed postage-paid envelope so that it is received by the Corporate Secretary of KapStone prior to the KapStone special meeting; or

authorizing the individuals named on your proxy card to vote your shares by calling the toll-free telephone number or by logging on to the Internet website specified in the instructions included with your proxy card by 11:59 p.m. New York City time on the day preceding the KapStone special meeting.
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If you hold KapStone shares through a broker or other nominee, you may instruct your broker or other nominee to vote your KapStone shares by following the instructions that the broker or other nominee provides to you with these materials.
Q:
What vote is required to approve each KapStone proposal?
A:
KapStone Merger Proposal.   Assuming a quorum is present, approving the KapStone merger proposal requires the affirmative vote of holders of a majority of the KapStone shares issued and outstanding and entitled to vote thereon. If you are a KapStone stockholder and fail to vote or vote to abstain, it will have the effect of a vote “AGAINST” the KapStone merger proposal. KapStone shares held by brokers or other nominees that are present in person or by proxy at the KapStone special meeting, but with respect to which the broker or other nominee is not instructed by the beneficial owner of such shares how to vote on a particular proposal and the broker or other nominee does not have discretionary voting power on such proposal (referred to as broker non-votes), will have the effect of a vote “AGAINST” the KapStone merger proposal, assuming a quorum is present.
KapStone Adjournment Proposal.   Assuming a quorum is present, approving the adjournment proposal requires the affirmative vote of holders of a majority of the KapStone shares present in person or represented by proxy at the KapStone special meeting and entitled to vote on the KapStone adjournment proposal. If you are a KapStone stockholder and fail to vote, it will have no effect on the KapStone adjournment proposal, assuming a quorum is present, and broker non-votes will have no effect on the KapStone adjournment proposal, assuming a quorum is present. If you are a KapStone stockholder and you mark your proxy card or voting instructions to abstain, it will have the effect of a vote “AGAINST” the KapStone adjournment proposal.
KapStone Compensation Proposal.   In accordance with Section 14A of the Exchange Act, KapStone is providing its stockholders with the opportunity to vote on a non-binding, advisory proposal to approve the compensation and benefits that may be paid, become payable or be provided to KapStone’s named executive officers in connection with the mergers, as reported in the section of this proxy statement/prospectus entitled “Proposal 1: Adoption of the Merger Agreement — Financial Interests of KapStone Directors and Officers in the Mergers”, beginning on page 76. Assuming a quorum is present, approving the KapStone compensation proposal, on a non-binding advisory basis, requires the affirmative vote of holders of a majority of the KapStone shares present in person or represented by proxy at the KapStone special meeting and entitled to vote on the KapStone compensation proposal. If you are a KapStone stockholder and fail to vote, it will have no effect on the KapStone compensation proposal, assuming a quorum is present, and broker non-votes will have no effect on the KapStone compensation proposal, assuming a quorum is present. If you are a KapStone stockholder and you mark your proxy card or voting instructions to abstain, it will have the effect of a vote “AGAINST” the KapStone compensation proposal.
Q:
How many votes do I have?
A:
You are entitled to one vote for each KapStone share that you owned as of the close of business on the record date. As of the close of business on the record date, there were [    ] KapStone shares outstanding entitled to vote at the KapStone special meeting.
Q:
What will happen if I fail to vote or I abstain from voting?
A:
If you are a KapStone stockholder and fail to vote or vote to abstain, it will have the effect of a vote “AGAINST” the KapStone merger proposal, and broker non-votes will have the effect of a vote “AGAINST” the KapStone merger proposal, assuming a quorum is present. If you are a KapStone stockholder and fail to vote, it will have no effect on the KapStone adjournment proposal or the KapStone compensation proposal, assuming a quorum is present, and broker non-votes will have no effect on the KapStone adjournment proposal or the KapStone compensation proposal, assuming a quorum is present. If you are a KapStone stockholder and you mark your proxy card or voting instructions to abstain, it will have the effect of a vote “AGAINST” the KapStone adjournment proposal and the KapStone compensation proposal.
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Q:
What constitutes a quorum?
A:
A quorum for action on any subject matter at any special meeting of KapStone stockholders will exist when the holders of a majority of the issued and outstanding KapStone shares entitled to vote on such subject matter are represented in person or by proxy at such meeting. KapStone shares represented at the KapStone special meeting but not voted, including KapStone shares for which a stockholder directs an “abstention” from voting, will be counted as present for purposes of establishing a quorum. Broker non-votes, if any, will not be counted as present for purposes of establishing a quorum. KapStone shares owned by KapStone as treasury shares will not be included in the calculation of the number of KapStone shares represented at the KapStone special meeting for purposes of determining whether a quorum is present.
Q:
If my shares are held in “street name” by my broker, will my broker automatically vote my shares for me?
A:
No. If you hold KapStone shares through a broker, bank, trust company or other nominee, you may instruct your broker, bank, trust company or other nominee to vote your KapStone shares by following the instructions that the broker, bank, trust company or other nominee provides to you with these materials. Most brokers offer the ability for stockholders to submit voting instructions by mail by completing a voting instruction card, by telephone and via the Internet. Broker non-votes, if any, will not be counted as present for purposes of establishing a quorum.
With respect to the KapStone merger proposal, a broker non-vote will have the effect of a vote “AGAINST” the proposal. With respect to the KapStone adjournment proposal and the KapStone compensation proposal, a broker non-vote will have no effect on such proposals.
If your KapStone shares are held in “street name” and you wish to vote your KapStone shares in person at the KapStone special meeting, you must bring to the KapStone special meeting a “legal proxy” executed in your favor from the record holder (your broker, bank, trust company or other nominee) of the KapStone shares authorizing you to vote at the KapStone special meeting.
Q:
What will happen if I return my proxy card without indicating how to vote?
A:
If a signed proxy card is returned without an indication as to how the KapStone shares represented are to be voted with regard to a particular proposal, the KapStone shares represented by the proxy card will be voted “FOR” each such proposal.
Q:
Can I change my vote after I have returned a proxy card or voting instruction card?
A:
Yes. You may change your vote at any time before your proxy is voted at the KapStone special meeting. You may do this in one of four ways:

by sending a notice of revocation to the Corporate Secretary of KapStone, dated as of a later date than the date of the proxy card and received by the Corporate Secretary of KapStone prior to the KapStone special meeting;

by sending a completed proxy card bearing a later date than your original proxy card and mailing it so that it is received by the Corporate Secretary of KapStone prior to the KapStone special meeting;

by calling the toll-free telephone number or by logging on to the Internet website specified in the instructions included with your proxy card, in each case if you are eligible to do so and following the instructions on the proxy card and by 11:59 p.m. New York City time on the day preceding the KapStone special meeting; or

by attending the KapStone special meeting and voting in person.
Your attendance alone will not revoke any proxy. If your KapStone shares are held in “street name”, you should follow the instructions of your broker regarding the revocation of proxies.
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Q:
What should KapStone stockholders do if they receive more than one set of voting materials?
A:
You may receive more than one set of voting materials with respect to the proposals described in this proxy statement/prospectus, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your KapStone shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record of KapStone shares and your KapStone shares are registered in more than one name, you will receive more than one proxy card. In each case, please complete, sign, date and return each proxy card and voting instruction card that you receive to ensure that all of your shares are voted.
Q:
May I transfer KapStone shares if I have elected to receive the KapStone stock consideration?
A:
Yes, but once you make a stock election with respect to any KapStone shares, you will be unable to sell or otherwise transfer such KapStone shares unless you properly revoke your stock election prior to the election deadline or the merger agreement is terminated.
Q:
What happens if I transfer my KapStone shares before the KapStone special meeting?
A:
The record date is earlier than the date of the KapStone special meeting and the date that the mergers are expected to be completed. If you transfer your KapStone shares after the record date but before the KapStone special meeting, you will retain your right to vote at the KapStone special meeting, but you will not have the right to receive the KapStone merger consideration. In order to receive the KapStone merger consideration, you must hold your KapStone shares through the completion of the mergers.
Q:
Who is the inspector of election?
A:
The KapStone board has appointed a representative of Morrow Sodali LLC to act as the inspector of election for the KapStone special meeting.
Q:
Where can I find the voting results of the KapStone special meeting?
A:
The preliminary voting results are expected to be announced at the KapStone special meeting. In addition, within four business days following certification of the final voting results, KapStone intends to file the final voting results of its special meeting with the SEC on Form 8-K.
Q:
What will happen if all of the proposals to be considered at the KapStone special meeting are not approved?
A:
As a condition to the completion of the mergers, KapStone stockholders must approve the KapStone merger proposal. Completion of the mergers is not conditioned or dependent on approval of any of the other proposals to be considered at the KapStone special meeting.
Q:
Why are KapStone stockholders being asked to approve, on a non-binding advisory basis, the compensation and benefits that may be paid, become payable or be provided to KapStone’s named executive officers in connection with the mergers?
A:
The rules promulgated by the SEC under Section 14A of the Exchange Act require KapStone to seek a non-binding, advisory vote with respect to certain compensation and benefits that may be paid, become payable or be provided to KapStone’s named executive officers in connection with the mergers. For more information regarding such payments, see the section entitled “Proposal 1: Adoption of the Merger Agreement — Financial Interests of KapStone Directors and Officers in the Mergers”, beginning on page 76.
Q:
What will happen if KapStone stockholders do not approve, on a non-binding advisory basis, the compensation and benefits that may be paid, become payable or be provided to KapStone’s named executive officers in connection with the mergers?
A:
The vote on the KapStone compensation proposal is a vote separate and apart from the vote on the KapStone merger proposal. Accordingly, a KapStone stockholder may vote to approve the KapStone merger proposal and vote not to approve the KapStone compensation proposal, and vice versa.
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Because the vote on the KapStone compensation proposal is advisory only, the outcome of such vote will not be binding on KapStone or Holdco. Accordingly, if the merger agreement is approved and adopted by the KapStone stockholders and the mergers are completed, the compensation and benefits with respect to the named executive officers of KapStone will be payable or be provided, subject only to the conditions applicable thereto, regardless of the outcome of the vote on the KapStone compensation proposal.
Q:
What do I need to do now?
A:
Carefully read and consider the information contained in and incorporated by reference into this proxy statement/prospectus, including its annexes.
If you are a holder of record of KapStone shares as of the close of business on the record date, in order for your KapStone shares to be represented at the KapStone special meeting, you must:

vote in person by attending the KapStone special meeting;

mark, sign and date the accompanying proxy card and return it in the enclosed postage-paid envelope so that it is received by the Corporate Secretary of KapStone prior to the KapStone special meeting; or

authorize the individuals named on your proxy card to vote your shares by calling the toll-free telephone number or by logging on to the Internet website specified in the instructions included with your proxy card by 11:59 p.m. New York City time on the day preceding the KapStone special meeting.
If you hold KapStone shares through a broker or other nominee, you may instruct your broker or other nominee to vote your KapStone shares by following the instructions that the broker or other nominee provides to you with these materials.
Q:
Who can help answer my questions?
A:
KapStone stockholders who have questions about the merger agreement, the mergers or the other matters to be voted on at the KapStone special meeting or desire additional copies of this proxy statement/prospectus or additional proxy cards or election forms should contact:
Morrow Sodali LLC
470 West Avenue
Stamford, CT 06902
KapStone stockholders call toll free: (800) 662-5200
Banks and brokerage firms call: (203) 658-9400
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SUMMARY
This summary highlights information contained elsewhere in this proxy statement/prospectus and may not contain all the information that is important to you. You are urged to read carefully the remainder of this proxy statement/prospectus, including the attached annexes and the other documents to which we have referred you, because this section does not provide all the information that might be important to you with respect to the mergers and the other matters being considered at the KapStone special meeting. See also the section entitled “Where You Can Find More Information”, beginning on page 155. We have included page references to direct you to a more complete description of the topics presented in this summary.
The Companies
WestRock Company
WestRock Company
1000 Abernathy Road NE
Atlanta, Georgia 30328
Telephone: (770) 448-2193
WestRock Company, a Delaware corporation, is a multinational provider of paper and packaging solutions for consumer and corrugated packaging markets. WestRock partners with its customers to provide differentiated paper and packaging solutions that help them win in the marketplace. WestRock’s 45,000 team members support customers around the world from more than 300 operating and business locations spanning North America, South America, Europe, Asia and Australia.
WestRock shares are listed on the NYSE, under the symbol “WRK”.
Additional information about WestRock and its subsidiaries is included in documents incorporated by reference in this proxy statement/prospectus. See the section entitled “Where You Can Find More Information”, beginning on page 155.
KapStone Paper and Packaging Corporation
KapStone Paper and Packaging Corporation
1101 Skokie Boulevard, Suite 300
Northbrook, IL 60062
Telephone: (847) 239-8800
KapStone Paper and Packaging Corporation, founded in 2005 and headquartered in Northbrook, Illinois, is the fifth largest producer of containerboard and the largest producer of kraft paper in North America, based on production capacity. KapStone conducts its operations in two segments: (i) Paper and Packaging, which manufactures and sells a wide variety of containerboard, corrugated products and specialty paper for industrial and consumer markets and (ii) Distribution, through Victory Packaging, L.P., a packaging solutions distribution company with facilities in the United States, Canada and Mexico. KapStone operates four containerboard mills, 23 corrugated products manufacturing plants and 60 distribution centers and employs approximately 6,400 employees.
KapStone shares are listed on the NYSE under the symbol “KS”.
Additional information about KapStone and its subsidiaries is included in documents incorporated by reference in this proxy statement/prospectus. See the section entitled “Where You Can Find More Information”, beginning on page 155.
Whiskey Holdco, Inc.
Whiskey Holdco, Inc.
c/o WestRock Company
1000 Abernathy Road NE
Atlanta, Georgia 30328
Telephone: (770) 448-2193
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Whiskey Holdco, Inc., a wholly owned subsidiary of WestRock, is a Delaware corporation that was incorporated on January 25, 2018 for the purpose of effecting the mergers. To date, Holdco has not conducted any activities other than those incidental to its formation or those relating to the transactions contemplated by the merger agreement. Pursuant to the merger agreement, immediately prior to the completion of the mergers, the name of Holdco will be changed to “WestRock Company” and the name of the surviving company in the WestRock merger will be changed to a name to be determined by WestRock. As of the completion of the mergers, WestRock and KapStone will each become a wholly owned subsidiary of Holdco and it is expected that the Holdco shares will be listed on the NYSE under the symbol “WRK”. The business of Holdco will be the combined businesses currently conducted by WestRock and KapStone.
Whiskey Merger Sub, Inc.
Whiskey Merger Sub, Inc.
c/o WestRock Company
1000 Abernathy Road NE
Atlanta, Georgia 30328
Telephone: (770) 448-2193
Whiskey Merger Sub, Inc., a wholly owned subsidiary of Holdco, is a Delaware corporation that was incorporated on January 25, 2018 for the purpose of effecting the WestRock merger. To date, WestRock Merger Sub has not conducted any activities other than those incidental to its formation or those relating to the transactions contemplated by the merger agreement. Pursuant to the merger agreement, WestRock Merger Sub will be merged with and into WestRock, with WestRock surviving the WestRock merger as a wholly owned subsidiary of Holdco.
Kola Merger Sub, Inc.
Kola Merger Sub, Inc.
c/o WestRock Company
1000 Abernathy Road NE
Atlanta, Georgia 30328
Telephone: (770) 448-2193
Kola Merger Sub, Inc., a wholly owned subsidiary of Holdco, is a Delaware corporation that was incorporated on January 25, 2018 for the purpose of effecting the KapStone merger. To date, KapStone Merger Sub has not conducted any activities other than those incidental to its formation or those relating to the transactions contemplated by the merger agreement. Pursuant to the merger agreement, KapStone Merger Sub will be merged with and into KapStone, with KapStone surviving the KapStone merger as a wholly owned subsidiary of Holdco.
The Mergers and the Merger Agreement
A copy of the merger agreement is attached as Annex A to this proxy statement/prospectus and is incorporated herein by reference. KapStone and WestRock encourage you to read the entire merger agreement carefully because it is the principal document governing the mergers and this summary description of the merger agreement is qualified in its entirety by reference to the complete text of the merger agreement. For more information on the merger agreement, see the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger Agreement”, beginning on page 98.
Effects of the Mergers (See page 99)
Subject to the terms and conditions of the merger agreement:

WestRock Merger Sub will be merged with and into WestRock, with WestRock surviving such merger as a wholly owned subsidiary of Holdco (referred to as the WestRock merger); and

KapStone Merger Sub will be merged with and into KapStone, with KapStone surviving such merger as a wholly owned subsidiary of Holdco (referred to as the KapStone merger and, together with the WestRock merger, the mergers).
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As a result, among other things, (1) Holdco will become the ultimate parent of WestRock, KapStone and their respective subsidiaries, (2) existing WestRock shares will automatically convert into Holdco shares and (3) existing KapStone stockholders will receive Holdco shares or cash, in each case in accordance with the terms of the merger agreement.
The organization of WestRock, KapStone and Holdco before and after the mergers is illustrated on this page and the following page:
Prior to the Mergers
[MISSING IMAGE: tv489363_chrt-org1.jpg]
The Mergers
[MISSING IMAGE: tv489363_chrt-org2.jpg]
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After the Mergers
[MISSING IMAGE: tv489363_chrt-org3.jpg]
Effect on the Capital Stock (See page 100)
Subject to the terms and conditions set forth in the merger agreement, KapStone stockholders will have the right to elect to receive with respect to each KapStone share they hold (other than KapStone shares in respect of which a KapStone stockholder has properly demanded appraisal rights in accordance with the DGCL), subject to certain proration procedures described below, either: (i) the KapStone cash consideration, which is $35.00 in cash, without interest thereon, or (ii) the KapStone stock consideration, which is 0.4981 Holdco shares. KapStone stockholders will not receive any fractional Holdco shares in the KapStone merger. Instead, KapStone stockholders will receive cash in lieu of any fractional Holdco shares that they would otherwise have been entitled to receive.
Under the merger agreement, the maximum stock amount, which is the maximum number of Holdco shares that may be issued to KapStone stockholders as KapStone stock consideration, is equal to (i) 25% of the product of  (A) 0.4981 and (B) the number of issued and outstanding KapStone shares immediately prior to the effective time, (ii) rounded down to the nearest whole number.
A KapStone stockholder’s ability to make a stock election is subject to proration procedures set forth in the merger agreement. These procedures are designed to ensure that the KapStone stock consideration is received in respect of no more than 25% of the KapStone shares issued and outstanding immediately prior to the effective time. Whether a KapStone stockholder receives the amount of KapStone stock consideration requested will depend in part on the stock elections of other KapStone stockholders. Even if a KapStone stockholder makes a stock election with respect to any KapStone shares, it may not receive the KapStone stock consideration in respect of such stock election shares. The greater the oversubscription of the stock election, the fewer Holdco shares and more cash a KapStone stockholder making a stock election will receive in respect of its stock election shares.
If the mergers are completed and the maximum stock amount is issued to KapStone stockholders, assuming 100.3 million KapStone shares are issued and outstanding immediately prior to the effective time and 256.5 million WestRock shares are issued and outstanding immediately prior to the effective time, approximately 4.6% of the issued and outstanding Holdco shares immediately following the effective time of the mergers will be held by former KapStone stockholders.
If a KapStone stockholder makes no stock election with respect to any of its KapStone shares and does not properly demand appraisal in accordance with the DGCL, it will receive the KapStone cash consideration in respect of such shares. In no event will a KapStone stockholder making no stock election with respect to its KapStone shares receive the KapStone stock consideration in respect of any of its KapStone shares. For a description of the applicable stock election procedures, see the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger Agreement — Election Procedures”, beginning on page 102.
The merger agreement does not contain any provision that would adjust the exchange ratio based on fluctuations in the market value of either KapStone shares or WestRock shares. Because of this, the implied
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value of the KapStone stock consideration will fluctuate between now and the completion of the mergers. The value of the KapStone stock consideration depends on the market value of Holdco shares at the time the mergers are completed, which will in turn be affected by the market value of KapStone shares and WestRock shares at the time the mergers are completed.
At the effective time, each issued and outstanding WestRock share will be converted into one Holdco share.
On January 26, 2018, the last trading day prior to the public announcement of the proposed mergers, the closing price on the NYSE was $26.54 per KapStone share and $70.27 per WestRock share. On [           ], 2018, the latest practicable date before the date of this proxy statement/prospectus, the closing price on the NYSE was $[    ] per KapStone share and $[    ] per WestRock share. We urge you to obtain current market quotations before voting your shares.
Treatment of KapStone Stock Options, Other KapStone Equity-Based Awards and the KapStone ESPP (See page 88)
Each option to purchase KapStone shares (referred to as a KapStone option) that is outstanding immediately prior to the effective time will be converted at the effective time into an option to purchase, on the same terms and conditions (including applicable vesting requirements, but subject to the amendments described below with respect to equity-based awards outstanding as of the date of the merger agreement) as were applicable to such KapStone option immediately prior to the effective time, a number of Holdco shares (rounded down to the nearest whole share) determined by multiplying the number of KapStone shares subject to the KapStone option by a fraction, the numerator of which is $35.00 and the denominator of which is the average of the volume weighted average price per share of WestRock shares on the NYSE (as reported by Bloomberg L.P. or another authoritative source mutually selected by WestRock and KapStone) on each of the five consecutive trading days ending with the second complete trading day immediately prior to the closing date (as defined below) (referred to as the equity award exchange ratio), at an exercise price per share (rounded up to the nearest whole cent) determined by dividing the per-share exercise price of the KapStone option by the equity award exchange ratio. Notwithstanding the foregoing, any KapStone option held by a non-employee member of the KapStone board will vest in full upon the effective time.
Each KapStone restricted stock unit award (referred to as a KapStone RSU award) that is outstanding immediately prior to the effective time will be converted at the effective time into a Holdco restricted stock unit award, on the same terms and conditions (including applicable vesting requirements, but subject to the amendments described below with respect to equity-based awards outstanding as of the date of the merger agreement, and including any rights in respect of dividend equivalents, if any, that were accrued but unpaid as of immediately prior to the effective time) as were applicable to such KapStone RSU award immediately prior to the effective time, and relating to the number of Holdco shares (rounded to the nearest whole share) determined by multiplying the number of KapStone shares subject to the KapStone RSU award by the equity award exchange ratio. Notwithstanding the foregoing, any KapStone RSU award held by a non-employee member of the KapStone board will vest in full upon the effective time.
Pursuant to the merger agreement, KapStone options and KapStone RSU awards that were outstanding as of the date of the merger agreement (other than awards held by a non-employee member of the KapStone board) have been amended to provide that such KapStone options and KapStone RSU awards will immediately vest in full if, following the effective time, the award holder experiences a termination of employment by KapStone or any of its affiliates without “cause” or resigns employment for “good reason”, as described below in “Proposal 1: Adoption of the Merger Agreement — The Merger Agreement — Treatment of Equity-Based Awards and Employee Stock Purchase Plans”. With respect to KapStone’s 2018 annual equity grants made as of February 23, 2018 (which consisted entirely of KapStone RSU awards), two-thirds of each such award was made subject to the same “double-trigger” vesting conditions described in the preceding sentence. The remaining one-third of each such award would be forfeited upon any termination of employment prior to the normal vesting date.
Prior to the effective time, the KapStone board (or, if appropriate, an administering committee) will take all actions as it deems necessary or appropriate to ensure that (i) the offering period under the KapStone Paper and Packaging Corporation 2009 Employee Stock Purchase Plan (referred to as the
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KapStone ESPP) that commenced on January 1, 2018 will be the final offering period under the KapStone ESPP, (ii) no new participants may join the KapStone ESPP on or after the date of the merger agreement, (iii) no participant may increase the amount of his or her salary deferrals with respect to the offering period that commenced on January 1, 2018 and (iv) the KapStone ESPP will terminate on the earlier of (A) immediately following the purchase date for the offering period that commenced on January 1, 2018 and (B) two business days prior to the effective time, in which case all participant contributions then in the KapStone ESPP will be used to purchase KapStone shares on such date in accordance with the terms of the KapStone ESPP as if such date was the purchase date for such offering period, and such KapStone shares will be no election shares.
Treatment of WestRock Options, Other WestRock Equity-Based Awards and the WestRock ESPP (See page 89)
At the effective time, each WestRock restricted stock unit award (referred to as a WestRock RSU award), WestRock restricted stock award, option to purchase WestRock shares (referred to as a WestRock option), WestRock stock appreciation right (referred to as a WestRock SAR) and WestRock director stock unit award will be assumed by Holdco and will become a restricted stock unit award, restricted stock award, stock option, stock appreciation right or director stock unit, as applicable, of Holdco with respect to an equivalent number of Holdco shares on the same terms and conditions as were applicable immediately prior to the effective time.
Prior to the effective time, the WestRock board of directors (referred to as the WestRock board) will take all actions as it deems necessary or appropriate to ensure that (i) the WestRock Company Employee Stock Purchase Plan (referred to as the WestRock ESPP) will be assumed by Holdco (with appropriate adjustments to the terms of the WestRock ESPP, including the securities issuable thereunder) and (ii) each outstanding purchase right under the WestRock ESPP will be converted into a purchase right to acquire, on the same terms and conditions as were applicable to such purchase right as of immediately prior to the effective time, a number of Holdco shares determined in accordance with the terms of the assumed WestRock ESPP.
Material U.S. Federal Income Tax Consequences of the Mergers (See page 83)
WestRock and KapStone intend for the KapStone merger, when taken together with the WestRock merger, to qualify as a transaction described in Section 351 of the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder (referred to as the Code). It is a condition to KapStone’s obligation to complete the KapStone merger that KapStone receive an opinion from Sidley Austin LLP (referred to as Sidley), counsel to KapStone, or another nationally recognized law firm, to the effect that the KapStone merger, when taken together with the WestRock merger, should qualify as a transaction described in Section 351 of the Code. Assuming the receipt and accuracy of the opinion described above, and subject to the limitations and qualifications described in “Proposal 1: Adoption of the Merger Agreement — Material U.S. Federal Income Tax Consequences of the Mergers to U.S. Holders of KapStone Shares”, the U.S. federal income tax consequences of the KapStone merger to U.S. holders (as defined on page 83) of KapStone shares are as follows:
The consequences of the KapStone merger, when taken together with the WestRock merger, to a U.S. holder of KapStone shares will depend on the relative mix of cash and Holdco shares received by the U.S. holder in the KapStone merger. A U.S. holder of KapStone shares that exchanges all of its KapStone shares solely for Holdco shares will generally not recognize any gain or loss for U.S. federal income tax purposes upon the exchange of KapStone shares for Holdco shares in the KapStone merger, except with respect to any cash received in lieu of fractional Holdco shares. A U.S. holder of KapStone shares that exchanges all of its KapStone shares solely for cash generally will recognize capital gain or loss measured by the difference between the amount of cash received in the KapStone merger and the U.S. holder’s basis in the KapStone shares surrendered in exchange for such cash. A U.S. holder of KapStone shares that exchanges KapStone shares for a combination of Holdco shares and cash will recognize gain (but not loss), but the U.S. holder’s taxable gain in that case will not exceed the amount of cash received in the KapStone merger.
Please carefully review the information set forth in the section entitled “Proposal 1: Adoption of the Merger Agreement — Material U.S. Federal Income Tax Consequences of the Mergers to U.S. Holders of
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KapStone Shares”, beginning on page 83 for a description of the material U.S. federal income tax consequences of the merger. The tax consequences to you of the KapStone merger will depend on your own situation. Please consult your own tax advisors as to the specific tax consequences to you of the mergers.
Recommendation of the KapStone Board of Directors (See page 57)
After careful consideration, on January 28, 2018 the KapStone board unanimously approved and adopted the merger agreement and the transactions contemplated thereby, on the terms and subject to the conditions set forth therein, including the KapStone merger, determined that the terms of the merger agreement are in the best interests of KapStone and its stockholders, declared the merger agreement advisable and further resolved to recommend that KapStone stockholders approve the KapStone merger proposal (referred to as the KapStone recommendation) and approve the KapStone compensation proposal. The KapStone board unanimously recommends that KapStone stockholders vote “FOR” each of the KapStone merger proposal, the KapStone adjournment proposal and the KapStone compensation proposal. For a summary of the factors considered by the KapStone board in reaching its decision to approve and adopt the merger agreement and the transactions contemplated thereby, as well as the KapStone board’s reasons for, and certain risks related to, the KapStone merger, see the section entitled “Proposal 1: The Adoption of the Merger Agreement — KapStone’s Reasons for the Mergers; Recommendation of the KapStone Board of Directors”, beginning on page 57.
Opinions of KapStone’s Financial Advisors (See page 63)
Rothschild Inc. (referred to as Rothschild)
KapStone retained Rothschild to act as its financial advisor in connection with the mergers. In connection with Rothschild’s engagement, the KapStone board requested that Rothschild evaluate the fairness, from a financial point of view, to KapStone stockholders of the KapStone cash consideration payable to KapStone stockholders in the mergers pursuant to the terms of the merger agreement. On January 28, 2018, at a meeting of the KapStone board held to evaluate the mergers, Rothschild rendered to the KapStone board an oral opinion, confirmed by delivery of a written opinion, dated January 28, 2018, to the effect that, as of that date and based on and subject to the assumptions, procedures, factors, qualifications and limitations set forth in Rothschild’s written opinion, the KapStone cash consideration payable to KapStone stockholders in the mergers pursuant to the terms of the merger agreement was fair, from a financial point of view, to such KapStone stockholders.
The full text of Rothschild’s written opinion, dated January 28, 2018, to the KapStone board, which sets forth, among other things, the assumptions, procedures, factors, qualifications and limitations on the review undertaken by Rothschild in connection with such opinion, is attached to this proxy statement/​prospectus as Annex B. The description of Rothschild’s opinion set forth in this proxy statement/prospectus is qualified in its entirety by reference to the full text of Rothschild’s opinion. Rothschild’s opinion was provided for the benefit of the KapStone board (solely in its capacity as such) in connection with and for the purpose of its evaluation of the mergers and was limited to the fairness, from a financial point of view, to KapStone stockholders of the KapStone cash consideration payable to KapStone stockholders in the mergers pursuant to the terms of the merger agreement. Rothschild’s opinion did not address the underlying decision that KapStone made to engage in the mergers or any alternative transaction, including the relative merits of the mergers as compared to any alternative transaction, including any alternative transaction that the KapStone board has considered and elected not to pursue. Rothschild’s opinion does not constitute a recommendation to the KapStone board as to whether to approve the mergers or a recommendation as to whether or not any KapStone stockholder should vote, make any election or otherwise act with respect to the mergers or any other matter.
For a description of the opinion that the KapStone board received from Rothschild, see the section entitled “Proposal 1: Adoption of the Merger Agreement — Opinions of KapStone’s Financial Advisors — Rothschild Inc.”, beginning on page 63.
Moelis & Company LLC (referred to as Moelis)
KapStone retained Moelis to act as its financial advisor in connection with the mergers. In connection with Moelis’ engagement, the KapStone board requested that Moelis evaluate the fairness, from a financial
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point of view, to KapStone stockholders of the KapStone cash consideration to be received by KapStone stockholders pursuant to the merger agreement. On January 25, 2018, Moelis presented its preliminary financial analysis of KapStone to the KapStone board. On January 28, 2018, at a meeting of the KapStone board held to evaluate the mergers, Moelis rendered to the KapStone board an oral opinion, confirmed by delivery of a written opinion, dated January 28, 2018, to the effect that, as of the date of the opinion, based on and subject to the qualifications, conditions, limitations and assumptions set forth in Moelis’ written opinion, the KapStone cash consideration to be received by KapStone stockholders pursuant to the merger agreement is fair, from a financial point of view, to the KapStone stockholders.
The full text of Moelis’ written opinion, dated January 28, 2018, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Moelis in connection with such opinion, is attached to this proxy statement/prospectus as Annex C. The description of Moelis’ opinion set forth in this proxy statement/prospectus is qualified in its entirety by reference to the full text of Moelis’ opinion. Moelis’ opinion was provided for the use and benefit of the KapStone board (solely in its capacity as such) in its evaluation of the mergers. Moelis’ opinion is limited solely to the fairness, from a financial point of view, of the KapStone cash consideration and does not address KapStone’s underlying business decision to effect the mergers or the relative merits of the mergers as compared to any alternative business strategies or transactions that might be available with respect to KapStone. Moelis’ opinion does not constitute a recommendation as to how any KapStone stockholder should vote, make any election (including without limitation, a stock election), or act with respect to the mergers or any other matter.
For a description of the opinion that the KapStone board received from Moelis, see the section entitled “Proposal 1: Adoption of the Merger Agreement — Opinions of KapStone’s Financial Advisors — Moelis & Company LLC”, beginning on page 69.
Financial Interests of KapStone Directors and Officers in the Mergers (See page 76)
The executive officers and directors of KapStone have certain interests, including financial interests, in the mergers that may be different from, or in addition to, the interests of KapStone stockholders generally. Such interests include the treatment of KapStone equity-based awards held by executive officers and directors, as well as payments and benefits to which certain executive officers may become entitled under certain change in control severance agreements and success and/or retention bonus arrangements, in each case in connection with the mergers. The KapStone board was aware of these interests and considered them, among other matters, in approving the merger agreement and the transactions contemplated thereby, and in making the KapStone recommendation.
Directors and Officers of Holdco Following the Mergers (See page 82)
Pursuant to the merger agreement and Section 251(g) of the DGCL, the directors of WestRock at the effective time will, from and after the effective time, be the directors of Holdco, and the officers of WestRock at the effective time will, from and after the effective time, be the officers of Holdco.
Regulatory Clearances Required for the Mergers (See page 86)
The mergers are subject to the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (referred to as the HSR Act), which prevents WestRock and KapStone from completing the mergers until the applicable waiting period under the HSR Act is terminated or expires, and under the following laws of foreign jurisdictions: the Mexican Federal Law of Economic Competition, the Austrian Competition Act and the German Act Against Restraints of Competition.
While WestRock and KapStone expect to obtain all required regulatory clearances, we cannot assure you that these regulatory clearances will be obtained, that all required clearances will not involve the imposition of additional conditions on the completion of the mergers, including the requirement to divest assets, or require changes to the terms of the merger agreement. These conditions or changes could result in the conditions to the mergers not being satisfied. WestRock and KapStone cannot assure you that a challenge to the mergers will not be made or that, if a challenge is made, it will not succeed.
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Completion of the Mergers (See page 129)
We are currently targeting completion of the mergers by the end of the quarter ending September 30, 2018 or during the following quarter, subject to the required KapStone stockholder approval and regulatory clearances and the satisfaction or waiver of the other closing conditions. It is possible that factors outside the control of KapStone or WestRock could result in the mergers being completed at a later time or not at all.
No Solicitation of Acquisition Proposals (See page 116)
Except as expressly permitted in the merger agreement, from the date of the merger agreement until the earlier of the effective time or the termination of the merger agreement in accordance with its terms, KapStone has agreed not to:

directly or indirectly solicit, seek, initiate, knowingly encourage or knowingly facilitate any inquiries regarding, or the making of, any submission or announcement of a proposal or offer that constitutes, or would reasonably be expected to lead to, an acquisition proposal (as defined on page 119);

directly or indirectly engage in, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any other person any information in connection with or for the purpose of encouraging or facilitating, any proposal or offer that constitutes, or would reasonably be expected to lead to, an acquisition proposal;

approve, endorse or recommend any acquisition proposal; or

enter into any alternative acquisition agreement (as defined on page 119).
Discussions; Notice of Acquisition Proposal (See page 117)
If at any time prior to obtaining the KapStone stockholder approval, KapStone receives a written acquisition proposal from any third party that did not result from a violation of the non-solicitation provisions of the merger agreement, KapStone and its representatives may:

contact the person or group of persons who has made the acquisition proposal to clarify terms for the sole purpose of the KapStone board informing itself about the acquisition proposal;

furnish, pursuant to a confidentiality agreement with no less restrictive terms and conditions than the confidentiality agreement between WestRock and KapStone (referred to as an acceptable confidentiality agreement), information (including non-public information) regarding KapStone to the person who made the acquisition proposal, if the KapStone board determines in good faith, after consultation with a financial advisor and outside legal counsel, based on information then available, that such acquisition proposal constitutes or would reasonably be expected to lead to a superior proposal (as defined on page 120); and

engage in or participate in discussions or negotiations with the person making such acquisition proposal, if the KapStone board determines in good faith, after consultation with a financial advisor and outside legal counsel, based on information then available, that such acquisition proposal constitutes or would reasonably be expected to lead to a superior proposal.
KapStone has agreed to promptly notify WestRock in writing after receipt by KapStone of any proposal or offer that constitutes, or would reasonably be expected to lead to, an acquisition proposal.
Adverse Recommendation Change (See page 118)
Under the merger agreement, generally, the KapStone board may not:

change, withhold, withdraw, qualify or modify, in a manner adverse to WestRock (or publicly propose or resolve to change, withhold, withdraw, qualify or modify), the KapStone recommendation;

fail to include the KapStone recommendation in this proxy statement/prospectus;
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approve, declare advisable or recommend, or publicly propose to approve, declare advisable or recommend to the KapStone stockholders, an acquisition proposal;

if a tender offer or exchange offer for KapStone shares that constitutes an acquisition proposal is commenced, fail to recommend against acceptance of such tender offer or exchange offer by the KapStone stockholders;

if an acquisition proposal is made public, fail to reaffirm the KapStone recommendation within 10 business days after the request of WestRock (provided that the KapStone board is only obligated to make one reaffirmation with respect to any acquisition proposal and one reaffirmation with respect to any amendment thereto) (any action described in this bullet or the preceding bullets referred to as an adverse recommendation change); or

authorize, adopt or approve an acquisition proposal, or cause or permit KapStone to enter into any alternative acquisition agreement.
Subject to certain notice obligations to WestRock and certain obligations to discuss and negotiate in good faith any bona fide revisions proposed by WestRock to the merger agreement in response to such notice, at any time prior to obtaining the KapStone stockholder approval, the KapStone board may:

effect an adverse recommendation change in a situation that is not in response to a superior proposal if the KapStone board has determined in good faith, after consultation with outside legal counsel, that the failure to effect an adverse recommendation change would reasonably be expected to be inconsistent with the directors’ fiduciary duties under applicable law; or

if KapStone receives an acquisition proposal that the KapStone board determines in good faith, after consultation with a financial advisor and outside legal counsel, constitutes a superior proposal, authorize, adopt or approve such superior proposal and cause or permit KapStone to enter into an alternative acquisition agreement with respect to such superior proposal (subject to the payment of a termination fee).
Conditions to Completion of the Mergers (See page 129)
The respective obligations of KapStone, WestRock, Holdco, WestRock Merger Sub and KapStone Merger Sub to complete the mergers are each subject to the satisfaction or waiver of certain customary conditions, including, among other things:

the receipt of the KapStone stockholder approval;

the receipt of the following regulatory approvals: the expiration or termination of the applicable waiting periods (and any extension thereof) under the HSR Act and antitrust notification and approvals required under the Mexican Federal Law of Economic Competition, the Austrian Competition Act and the German Act Against Restraints of Competition;

the absence of any material law or order in effect that prevents, makes illegal or prohibits the consummation of the mergers;

the Registration Statement on Form S-4, of which this proxy statement/prospectus forms a part, being declared effective;

the Holdco shares to be issued as KapStone stock consideration upon the consummation of the KapStone merger and as WestRock merger consideration (as defined below) upon the consummation of the WestRock merger (such issuance collectively referred to as the Holdco stock issuance) being authorized for listing on the NYSE, subject to official notice of issuance;

the accuracy of the representations and warranties of the parties and compliance by the parties with their respective obligations under the merger agreement, in each case subject to certain materiality qualifiers; and

the receipt of opinions of counsel regarding the intended tax treatment of the KapStone merger and the WestRock merger.
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At any time prior to the effective time, the parties to the merger agreement may waive the satisfaction of any of the respective conditions to such party’s obligations to complete the mergers contained in the merger agreement. No waiver by KapStone will require the approval of the KapStone stockholders unless such approval is required by applicable law. For more information, see “The Merger Agreement — Amendment — Extension; Waiver”, beginning on page 134.
We cannot be certain when, or if, the conditions to the mergers will be satisfied or waived, or that the mergers will be completed.
Termination of the Merger Agreement (See page 131)
In general, the merger agreement may be terminated at any time prior to the effective time in the following ways:

By mutual written consent of KapStone and WestRock;

By either KapStone or WestRock:

if the mergers are not consummated on or before October 29, 2018 (referred to as the end date), and which may be extended in certain circumstances to April 29, 2019 (provided that a party may not terminate the merger agreement pursuant to this provision if its failure to fulfill any obligation under the merger agreement is a principal cause of the failure of the mergers to be consummated on or before such date);

if any governmental entity of competent authority issues a final nonappealable order or enacts a law that prohibits, prevents or makes illegal the consummation of the mergers; or

if KapStone stockholders fail to approve the KapStone merger proposal at the KapStone special meeting, or any adjournment or postponement thereof;

By KapStone:

so long as it is not then in material breach of any of its covenants or agreements contained in the merger agreement, if there has been a breach of or inaccuracy in any of WestRock’s, Holdco’s, WestRock Merger Sub’s or KapStone Merger Sub’s representations, warranties, covenants or other agreements in the merger agreement which (i) would result in the failure of a related closing condition and (ii) is not capable of being cured or is not cured within 30 days following WestRock’s receipt of written notice of such breach or inaccuracy; or

prior to receiving the KapStone stockholder approval, in order to enter into a definitive written agreement providing for a superior proposal after complying with its non-solicitation obligations under the merger agreement, if KapStone pays to WestRock the termination fee under the merger agreement of  $105,600,265 (referred to as the termination fee);

By WestRock:

so long as it, Holdco, WestRock Merger Sub and KapStone Merger Sub are not then in material breach of any of their respective covenants or agreements contained in the merger agreement, if there has been a breach of or inaccuracy in KapStone’s representations, warranties, covenants or other agreements in the merger agreement which (i) would result in the failure of a related closing condition and (ii) is not capable of being cured or is not cured within 30 days following KapStone’s receipt of written notice of such breach or inaccuracy; or

prior to obtaining the KapStone stockholder approval, in the event that an adverse recommendation change has occurred.
Termination Fees; Expense Reimbursement (See page 133)
Under the merger agreement, KapStone may be required to pay to WestRock a termination fee of $105,600,265 if the merger agreement is terminated under certain specified circumstances, including, in particular, a termination of the merger agreement by KapStone in order to enter into a definitive written agreement providing for a superior proposal.
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Under the merger agreement, KapStone may be required to reimburse WestRock’s expenses up to $17,600,104 if the merger agreement is terminated under certain specified circumstances. No reimbursement of such expenses will be required if KapStone has previously paid the termination fee.
The Voting Agreements (See page 135)
Concurrently with the execution of the merger agreement on January 28, 2018, as inducement for WestRock to enter into the merger agreement, WestRock entered into separate voting agreements (each referred to as a voting agreement and collectively, the voting agreements) with each of Mr. Roger Stone, Mr. Matthew Kaplan, the Roger W. Stone Revocable Trust and the Roger and Susan Stone Family Foundation, which together owned shares totaling approximately 9.5% of the KapStone shares issued and outstanding as of January 28, 2018.
Pursuant to the voting agreements, each such stockholder agreed during the term of its respective voting agreement to, among other things, upon the terms and subject to the conditions therein, (i) vote all of its KapStone shares in favor of the adoption of the merger agreement and in favor of the mergers and the other transactions contemplated by the merger agreement, and against, among other things, any alternative transaction that may be proposed, (ii) not solicit alternative transactions or participate in discussions or negotiations regarding alternative transactions, in each case, subject to certain exceptions, and (iii) subject to certain exceptions, not sell or otherwise transfer its KapStone shares. Each voting agreement may terminate in certain circumstances, including upon termination of the merger agreement or upon an amendment to the merger agreement that extends the end date or reduces the amount or changes the form of the KapStone merger consideration, if such stockholder has abstained from voting on or voted against such matter in such stockholder’s capacity as a director of KapStone.
Accounting Treatment (See page 86)
The mergers will be accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification Topic 805, Business Combinations, referred to as ASC 805. United States generally accepted accounting principles (referred to as U.S. GAAP) requires that one of WestRock or KapStone be designated as the acquirer for accounting purposes based on the evidence available. WestRock will be treated as the acquiring entity for accounting purposes. In identifying WestRock as the acquiring entity, WestRock and KapStone took into account the composition of the governing body of Holdco, and the size of each of WestRock and KapStone.
Appraisal Rights (See page 91)
If the KapStone merger is completed, KapStone stockholders who comply exactly with the applicable requirements and procedures of Section 262 of the DGCL will be entitled to demand appraisal of their KapStone shares and receive in lieu of the KapStone merger consideration a cash payment equal to the “fair value” of their KapStone shares (such shares for which appraisal is properly demanded referred to as dissenting shares), as determined by the Delaware Court of Chancery (referred to as the Court of Chancery), in accordance with Section 262 of the DGCL, plus interest, if any, on the amount determined to be the fair value, subject to the provisions of Section 262 of the DGCL. Such appraised value may be greater than, the same as or less than the KapStone merger consideration. Section 262 of the DGCL is included as Annex D to this proxy statement/prospectus. We encourage you to read these provisions carefully and in their entirety. Moreover, due to the complexity of the procedures for exercising and perfecting the right to seek appraisal, KapStone stockholders who are considering exercising such rights are encouraged to seek the advice of legal counsel. Failure to comply exactly with all of the procedures set forth in Section 262 of the DGCL will result in a loss of the right of appraisal. A KapStone stockholder who submits a proxy card and who wishes to exercise appraisal rights must mark “AGAINST” or “ABSTAIN” with respect to the KapStone merger proposal. KapStone stockholders who wish to exercise their appraisal rights and hold shares in the name of a bank, broker, trust or other nominee must instruct their bank, broker, trust or other nominee to take the steps necessary to enable them to demand appraisal for their shares.
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Listing, Delisting and Deregistration (See page 91)
It is a condition to the completion of the mergers that the Holdco shares to be issued in connection with the mergers be authorized for listing on the NYSE, subject to official notice of issuance. Following the completion of the mergers, Holdco will cause the KapStone shares to be delisted from the NYSE and deregistered under the Exchange Act.
Comparison of Rights of Holdco Stockholders and KapStone Stockholders (See page 143)
Upon completion of the mergers, KapStone stockholders receiving the KapStone stock consideration will become stockholders of Holdco and their rights will continue to be governed by Delaware law, including the DGCL, and will be governed by the governing corporate documents of Holdco in effect at the effective time. KapStone stockholders will have different rights once they become Holdco stockholders due to differences between the certificates of incorporation and bylaws of Holdco and KapStone. These differences are described in detail under “Comparison of Rights of Holdco Stockholders and KapStone Stockholders”, beginning on page 143.
The KapStone Special Meeting (See page 43)
The KapStone special meeting is scheduled to be held at KapStone Corporate Headquarters, 1101 Skokie Boulevard, Suite 300, Northbrook, Illinois 60062 on [           ], 2018 at [    ] local time. At the KapStone special meeting, KapStone stockholders will be asked:

to consider and vote on the KapStone merger proposal;

to consider and vote on the KapStone adjournment proposal; and

to consider and vote on the KapStone compensation proposal.
You may vote at the KapStone special meeting if you owned KapStone shares at the close of business on the record date. You may cast one vote for each KapStone share that you owned as of the close of business on the record date. As of the close of business on the record date, there were issued and outstanding a total of  [    ] KapStone shares entitled to vote at the KapStone special meeting. As of the close of business on the record date, approximately [    ]% of the issued and outstanding KapStone shares were held by KapStone directors, executive officers and their affiliates.
KapStone currently expects that its directors and executive officers will vote their KapStone shares in favor of the KapStone merger proposal, the KapStone adjournment proposal and the KapStone compensation proposal. Concurrently with the execution of the merger agreement on January 28, 2018, as inducement for WestRock to enter into the merger agreement, WestRock entered into separate voting agreements with Roger W. Stone, Executive Chairman of the KapStone board, and certain affiliated entities, which together owned shares totaling approximately 5.9% of the KapStone shares issued and outstanding as of January 28, 2018, and with Matthew Kaplan, KapStone’s President and Chief Executive Officer, who owned shares totaling approximately 3.6% of the KapStone shares issued and outstanding as of January 28, 2018. Each of Messrs. Stone and Kaplan agreed during the term of his respective voting agreement to, among other things, upon the terms and subject to the conditions therein, (i) vote all the KapStone shares that he beneficially owns in favor of the adoption of the merger agreement and against any alternative transaction that may be proposed, (ii) not solicit alternative transactions or participate in discussions or negotiations regarding alternative transactions, in each case, subject to certain exceptions, and (iii) subject to certain exceptions, will not sell or otherwise transfer his KapStone shares.
Completion of the mergers is conditioned on the KapStone stockholder approval. Assuming a quorum is present, the KapStone stockholder approval requires the affirmative vote of holders of a majority of the KapStone shares issued and outstanding and entitled to vote on the KapStone merger proposal. Assuming a quorum is present, approval of the KapStone adjournment proposal requires the affirmative vote of holders of a majority of the KapStone shares present in person or represented by proxy at the KapStone special meeting and entitled to vote on the adjournment proposal. Assuming a quorum is present, approval of the KapStone compensation proposal requires the affirmative vote of holders of a majority of the KapStone shares present in person or represented by proxy at the KapStone special meeting and entitled to vote on the KapStone compensation proposal.
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SELECTED HISTORICAL FINANCIAL DATA OF KAPSTONE
The following table sets forth selected historical consolidated financial information for KapStone and its consolidated subsidiaries. The selected consolidated financial information as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 has been derived from KapStone’s audited consolidated financial statements and related notes for the year ended December 31, 2017, contained in its Current Report on Form 8-K filed on May 4, 2018, which are incorporated by reference into this proxy statement/prospectus. The selected consolidated financial information as of December 31, 2015, 2014 and 2013 and for the years ended December 31, 2014 and 2013 has been derived from KapStone’s audited consolidated financial statements and related notes for such years, which have not been incorporated by reference into this proxy statement/prospectus, except for the 2014 and 2013 operating income line item which has not been audited.
The following information should be read together with KapStone’s consolidated financial statements, the notes related thereto and the related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in KapStone’s Annual Report on Form 10-K for the year ended December 31, 2017, as updated by KapStone’s Current Report on Form 8-K filed on May 4, 2018, incorporated herein by reference. See the section entitled “Where You Can Find More Information”, beginning on page 155. KapStone’s historical consolidated financial information may not be indicative of the future performance of KapStone or the combined company.
Years Ended December 31,
2017(3)
2016(4)
2015(1)(5)
2014
2013(1)(6)
(In thousands, except per share amounts)
Statement of Income Data:
Net sales
$ 3,315,660 $ 3,077,257 $ 2,789,345 $ 2,300,920 $ 1,748,162
Operating income(2)
$ 193,201 $ 165,066 $ 186,964 $ 285,454 $ 213,185
Net income
$ 243,503 $ 86,252 $ 106,386 $ 171,915 $ 127,338
Basic net income per share(7)
$ 2.51 $ 0.89 $ 1.11 $ 1.79 $ 1.34
Diluted net income per share(7)
$ 2.47 $ 0.88 $ 1.09 $ 1.76 $ 1.32
Cash dividends declared per common share
$ 0.40 $ 0.40 $ 0.40 $ 0.10 $
Balance Sheet Data:
Cash and cash equivalents
$ 28,065 $ 29,385 $ 6,821 $ 28,467 $ 12,967
Total assets
$ 3,323,985 $ 3,255,875 $ 3,222,110 $ 2,556,274 $ 2,651,862
Long-term liabilities
$ 1,764,441 $ 2,010,852 $ 2,026,775 $ 1,501,328 $ 1,715,504
Total stockholders’ equity
$ 1,137,014 $ 904,330 $ 845,280 $ 778,127 $ 666,080
(1)
Results for 2015 and later reflect the Victory Packaging, L.P. acquisition on June 1, 2015. Results for 2013 and later reflect the Longview acquisition on July 18, 2013.
(2)
In March 2017, the Financial Accounting Standard’s Board issued Accounting Standards Update No. 2017-07, “Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” (referred to as the ASU). The ASU applies to all employers that offer to their employees defined benefit pension plans, other postretirement benefit plans, or other types of benefits accounted for under Topic 715, Compensation —  Retirement Benefits. The ASU requires that an employer report the service cost component of net benefit cost in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. If a separate line item or items are used to present the other components of net benefit cost, that line item or items must be appropriately described. If a separate line
23

item or items are not used, the line item or items used in the income statement to present the other components of net benefit cost must be disclosed. The ASU also allows only the service cost component to be eligible for capitalization when applicable (e.g., as a cost of internally manufactured inventory or a self-constructed asset). Effective January 1, 2018, KapStone adopted the ASU applying the allowable practical expedient by using the amounts disclosed in the pension and other postretirement benefit plan footnote for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements to the periods presented. This resulted in a $5.9 million, $5.6 million, $12.2 million, $14.5 million and $6.7 million reclassification between operating income and pension income in KapStone’s consolidated statements of comprehensive income for the years ended December 31, 2017, 2016, 2015, 2014 and 2013, respectively, which reduced operating income accordingly.
(3)
2017 net income includes a $144.4 million provisional benefit due to the passage of the Tax Cuts and Jobs Act on December 22, 2017 (referred to as the Tax Act). Operating income in 2017 includes the following:

$10.2 million for the Oakland, California plant closure costs;

$5.9 million for union contract ratification costs;

$5.8 million related to the Victory Packaging, L.P. acquisition contingent consideration expense; and

$4.4 million for Ontario, California plant operating expenses.
(4)
2016 operating income includes the following:

$6.4 million of multiemployer pension plan expense due to the Company’s formal notification to withdraw from its GCIU multiemployer pension plan; and

$6.4 million of costs due to Hurricane Matthew.
(5)
2015 operating income includes the following:

$15.1 million due to the 2015 Longview mill work stoppage costs; and

$5.8 million of inventory step-up expense related to the Victory Packaging, L.P. acquisition.
(6)
2013 net income includes a $5.0 million benefit from the reversal of the tax reserves for alternative fuel mixture credits.
(7)
Earnings per share for all periods have been restated for the stock split declared in December 2013.
24

SELECTED HISTORICAL FINANCIAL DATA OF WESTROCK
The following table sets forth selected historical consolidated financial information for WestRock. The historical consolidated statements of operations and consolidated statements of cash flows data for the fiscal years ended September 30, 2017, 2016, 2015, 2014 and 2013 and the consolidated balance sheet data as of September 30, 2017, 2016, 2015 and 2014 were derived from the audited consolidated financial statements of WestRock. The consolidated balance sheet data as of September 30, 2013 was derived from audited consolidated financial statements of Rock-Tenn Company (referred to as RockTenn). RockTenn was the accounting acquirer in the business combination of RockTenn and MeadWestvaco Corporation which occurred on July 1, 2015 (referred to as the combination); therefore, the historical consolidated financial statements of RockTenn for periods prior to the combination are considered to be the historical financial statements of WestRock and thus WestRock’s consolidated financial statements for fiscal 2015 reflect RockTenn’s consolidated financial statements for periods from October 1, 2014 through June 30, 2015, and WestRock’s thereafter. The table that follows is consistent with those presentations with the exception of diluted earnings per share attributable to common stockholders, diluted weighted average shares outstanding, dividends per common share and book value per common share that have been adjusted retroactively due to RockTenn’s August 2014 two-for-one stock split. The combination was the primary reason for the changes in the selected financial data in fiscal 2016 and 2015 as compared to prior fiscal years due to the size and timing of the transaction. The selected financial data presented below has been updated to reflect the distribution of the outstanding common stock of Ingevity Corporation to WestRock stockholders on May 15, 2016 to complete the separation of the former Specialty Chemicals business of WestRock as an independent company.
The unaudited selected historical consolidated financial information for WestRock for the three months ended December 31, 2017 and as of December 31, 2017 has been derived from WestRock’s unaudited consolidated financial statements in its Quarterly Report on Form 10-Q for the three months ended December 31, 2017, which is incorporated by reference into this proxy statement/prospectus. The unaudited consolidated financial information includes all adjustments, consisting of normal recurring accruals, which WestRock considers necessary for a fair presentation of the financial position and the results of operations for this interim period. The results of operations for the three months ended December 31, 2017 may not be indicative of the results that may be expected for the entire fiscal year ending September 30, 2018.
The following information should be read together with WestRock’s consolidated financial statements and the notes related to those financial statements incorporated herein by reference. See the section entitled “Where You Can Find More Information”, beginning on page 155. WestRock’s historical consolidated financial information may not be indicative of the future performance of WestRock or the combined company.
Three Months
Ended
December 31,
2017
Year Ended September 30,
2017
2016
2015
2014
2013
(In millions, except per share amounts)
Net sales
$ 3,894.0 $ 14,859.7 $ 14,171.8 $ 11,124.8 $ 9,895.1 $ 9,545.4
Pension risk transfer expense(1)
$ $ $ 370.7 $ $ $
Multiemployer pension withdrawal(2)
$ 180.0 $ $ $ $ $
Pension lump sum settlement and retiree medical
curtailment, net(3)
$ $ 32.6 $ $ 11.5 $ 47.9 $
Land and Development impairment(4) 
$ 27.6 $ 46.7 $ $ $ $
Restructuring and other costs, net
$ 16.3 $ 196.7 $ 366.4 $ 140.8 $ 55.6 $ 78.0
Gain on sale of HH&B(5)
$ $ 192.8 $ $ $ $
Income from continuing operations(6)(7)
$ 1,133.5 $ 698.6 $ 154.8 $ 501.2 $ 483.8 $ 732.5
(Loss) income from discontinued operations (net
of tax)(8)
$ $ $ (544.7) $ 10.6 $ $
Net income (loss) attributable to common stockholders
$ 1,135.1 $ 708.2 $ (396.3) $ 507.1 $ 479.7 $ 727.3
25

Three Months
Ended
December 31,
2017
Year Ended September 30,
2017
2016
2015
2014
2013
(In millions, except per share amounts)
Diluted earnings per share from continuing operations
$ 4.38 $ 2.77 $ 0.59 $ 2.87 $ 3.29 $ 4.98
Diluted (loss) earnings per share from discontinued operations
$ $ $ (2.13) $ 0.06 $ $
Diluted earnings (loss) per share attributable to common stockholders
$ 4.38 $ 2.77 $ (1.54) $ 2.93 $ 3.29 $ 4.98
Diluted weighted average shares outstanding
259.2 255.7 257.9 173.3 146.0 146.1
Dividends paid per common share
$ 0.43 $ 1.60 $ 1.50 $ 1.20 $ 0.70 $ 0.525
Book value per common share
$ 44.54 $ 40.64 $ 38.75 $ 45.34 $ 30.76 $ 29.94
Total assets
$ 25,136.9 $ 25,089.0 $ 23,038.2 $ 25,372.4 $ 11,039.7 $ 10,733.4
Current portion of debt
$ 1,244.6 $ 608.7 $ 292.9 $ 63.7 $ 132.6 $ 2.9
Long-term debt due after one year
$ 5,365.8 $ 5,946.1 $ 5,496.3 $ 5,558.2 $ 2,852.1 $ 2,841.9
Total debt
$ 6,610.4 $ 6,554.8 $ 5,789.2 $ 5,621.9 $ 2,984.7 $ 2,844.8
Total stockholders’ equity
$ 11,353.4 $ 10,342.5 $ 9,728.8 $ 11,651.8 $ 4,306.8 $ 4,312.3
Net cash provided by operating activities 
$ 363.5 $ 1,900.5 $ 1,688.4 $ 1,203.6 $ 1,151.8 $ 1,032.5
Capital expenditures
$ 214.1 $ 778.6 $ 796.7 $ 585.5 $ 534.2 $ 440.4
Cash paid (received) for purchase of businesses, net of cash acquired
$ (3.4) $ 1,588.5 $ 376.4 $ (3.7) $ 474.4 $ 6.3
Cash received in business combination
$ $ $ $ 265.7 $ $
Purchases of common stock
$ $ 93.0 $ 335.3 $ 336.7 $ 236.3 $
Purchases of common stock – business combination related
$ $ $ $ 667.8 $ $
Cash dividends paid to stockholders
$ 109.6 $ 403.2 $ 380.7 $ 214.5 $ 101.1 $ 75.3
(1)
In fiscal 2016, WestRock used plan assets to settle $2.5 billion of pension obligations of the WestRock Company Consolidated Pension Plan (referred to as the plan) by purchasing group annuity contracts from Prudential. This transaction transferred payment responsibility to Prudential for retirement benefits owed to approximately 35,000 U.S. retirees and their beneficiaries. As a result, WestRock recorded a non-cash charge of  $370.7 million pre-tax.
(2)
In the three months ended December 31, 2017, WestRock recorded an estimated multiemployer pension withdrawal liability of  $180.0 million.
(3)
In fiscal 2017, lump sum payments to certain beneficiaries of the plan, together with several one-time severance benefit payments out of the plan, triggered pension settlement accounting and a remeasurement of the plan. As a result of settlement accounting, WestRock recognized as a current period expense a pro-rata portion of the unamortized net actuarial loss, after remeasurement, and recorded a $32.6 million non-cash charge to its earnings. In fiscal 2015, payments were made to former employees to partially settle obligations of one of WestRock’s qualified defined benefit pension plans and it recorded a non-cash pre-tax charge of  $20.0 million. In addition, changes in retiree medical coverage for certain employees covered by the United Steelworkers Union master agreement resulted in the recognition of an $8.5 million pre-tax curtailment gain. These two items netted to an $11.5 million pre-tax charge. In fiscal 2014, WestRock completed the first phase of its previously announced lump sum pension settlement to certain eligible former employees and recorded a pre-tax charge of $47.9 million.
(4)
In the three months ended December 31, 2017, WestRock recorded a $27.6 million pre-cash non-cash impairment of certain mineral rights and real estate in its Land and Development segment. Due to the accelerated monetization strategy in its Land and Development segment, WestRock recorded a pre-tax
26

non-cash real estate impairment of  $46.7 million, or $39.7 million net of  $7.0 million of noncontrolling interest, in fiscal 2017. The impairment was recorded to write-down the carrying value on projects where the projected sales proceeds were less than the carrying value.
(5)
On April 6, 2017, WestRock completed the sale of Home, Health and Beauty (referred to as HH&B), a former division of its Consumer Packaging segment. In fiscal 2017, WestRock recorded a pre-tax gain on the sale of HH&B of  $192.8 million.
(6)
In the three months ended December 31, 2017, WestRock recorded an estimated $1,086.9 million income tax benefit as a result of the passage of the Tax Act.
(7)
Income from continuing operations was impacted by the sale of HH&B, restructuring and other costs, net, the Land and Development impairment, the pension lump sum settlements and pension risk transfer as identified in the table above for the respective years. In addition, income from continuing operations in fiscal 2017 was reduced by $26.5 million pre-tax for the expensing of inventory stepped-up in purchase accounting, primarily related to the acquisition of Multi Packaging Solutions International Limited, and fiscal 2015 was reduced by $64.7 million pre-tax for the expensing of inventory stepped-up in purchase accounting, primarily related to the combination. Income from continuing operations in fiscal 2015, 2014 and 2013 was increased as a result of a reduction of cost of goods sold of  $6.7 million, $32.3 million and $12.2 million pre-tax, respectively, due to the recording of additional value of spare parts at WestRock’s containerboard mills acquired in the acquisition of Smurfit-Stone Container Corporation (referred to as the Smurfit-Stone acquisition). Income from continuing operations in fiscal 2013 was increased by the reversal of  $254.1 million of tax reserves related to alternative fuel mixture credits acquired in the Smurfit-Stone acquisition that were partially offset by a resulting increase in a state tax valuation allowance of  $1.2 million.
(8)
Loss from discontinued operations, net of tax in fiscal 2016 included a $478.3 million pre-tax goodwill impairment charge and $101.1 million pre-tax customer list impairment charge associated with WestRock’s former Specialty Chemicals operations. Income from discontinued operations, net of tax in fiscal 2015 was reduced by $8.2 million pre-tax for the expensing of inventory stepped-up in purchase accounting, net of related last-in first-out valuation method impact.
27

EQUIVALENT AND COMPARATIVE PER SHARE INFORMATION
The following table sets forth selected per share information for WestRock shares on a historical basis as of and for the fiscal year ended September 30, 2017 and as of and for the three months ended December 31, 2017, selected per share information for KapStone shares on a historical basis as of and for the fiscal year ended December 31, 2017 and as of and for the nine months ended September 30, 2017, selected per share information for Holdco shares on a pro forma combined basis as of and for the fiscal year ended September 30, 2017 and as of and for the three months ended December 31, 2017 and selected per share information for KapStone shares on a pro forma equivalent basis as of and for the twelve months ended September 30, 2017 and as of and for the three months ended December 31, 2017. Except for the historical information as of and for the fiscal year ended September 30, 2017, in the case of WestRock, and the historical information as of and for the fiscal year ended December 31, 2017, in the case of KapStone, the information in the table is unaudited.
The unaudited pro forma combined per share information for the fiscal year ended September 30, 2017 and as of and for the three months ended December 31, 2017 reflect the mergers as if they had occurred on October 1, 2016. The book value per share amounts in the tables below reflect the mergers as if they had occurred on September 30, 2017 or December 31, 2017.
The pro forma combined information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the mergers had been completed as of the beginning of the periods presented, nor is it necessarily indicative of the future operating results or financial position of the combined company. You should read the data with the historical consolidated financial statements and related notes of WestRock contained in its Annual Report on Form 10-K for the fiscal year ended September 30, 2017, historical consolidated financial statements and related notes of KapStone for the fiscal year ended December 31, 2017 contained in its Current Report on Form 8-K filed on May 4, 2018, WestRock’s Quarterly Reports on Form 10-Q for the three months ended December 31, 2017 and March 31, 2018 and KapStone’s Quarterly Report on Form 10-Q for the three months ended March 31, 2018, all of which are incorporated by reference into this proxy statement/​prospectus. See the section entitled “Where You Can Find More Information”, beginning on page 155.
As of and for the
Fiscal Year Ended
September 30, 2017
As of and for the
Three Months Ended
December 31, 2017
WestRock – Historical:
Book value per share
$ 40.64 $ 44.54
Cash dividends per share(1)
$ 1.60 $ 0.43
Diluted earnings per share attributable to WestRock stockholders from continuing operations
$ 2.77 $ 4.38
Basic earnings per share attributable to WestRock stockholders from continuing operations
$ 2.81 $ 4.45
As of and for the
Nine Months Ended
September 30, 2017
As of and for the
Fiscal Year Ended
December 31, 2017
KapStone – Historical:
Book value per share
$ 9.76 $ 11.72
Cash dividends per share(1)
$ 0.30 $ 0.40
Diluted earnings per share attributable to KapStone stockholders from
continuing operations(2)
$ 0.57 $ 2.47
Basic earnings per share attributable to KapStone stockholders from continuing operations(2)
$ 0.58 $ 2.51
28

As of and for the
Fiscal Year Ended
September 30, 2017
As of and for the
Three Months Ended
December 31, 2017
Holdco – Pro Forma Combined:
Book value per share
$ 40.35 $ 44.25
Cash dividends per share(3)
$ 1.60 $ 0.43
Diluted earnings per share attributable to Holdco stockholders from continuing operations(4)(5)(6)
$ 3.17 $ 4.95
Basic earnings per share attributable to Holdco stockholders from continuing operations(4)(5)(6)
$ 3.22 $ 5.04
As of and for the
Twelve Months Ended
September 30, 2017
As of and for the
Three Months Ended
December 31, 2017
KapStone – Pro Forma Equivalent(7):
Book value per share
$ 20.10 $ 22.04
Cash dividends per share
$ 0.80 $ 0.21
Diluted earnings per share attributable to KapStone stockholders from continuing operations
$ 1.58 $ 2.47
Basic earnings per share attributable to KapStone stockholders from continuing operations
$ 1.60 $ 2.51
(1)
For an explanation of WestRock’s and KapStone’s dividend histories, see the section entitled “Comparative Stock Prices and Dividends”, beginning on page 30.
(2)
KapStone’s quarter ended December 31, 2017 included a $144.4 million provisional benefit due to the passage of the Tax Act.
(3)
Holdco’s pro forma combined cash dividends per share represents WestRock’s historical cash dividends per WestRock share.
(4)
Holdco’s pro forma combined amounts for the fiscal year ended September 30, 2017 reflect (i) the assumption that the entire purchase price will be paid in cash, (ii) an income adjustment of an estimated $100 million pre-tax for depreciation and amortization associated with stepping up the property, plant and equipment and intangibles to their estimated fair values and (iii) an income adjustment of an estimated $109 million pre-tax for interest expense associated with debt expected to be incurred in connection with the transaction at an average interest rate of approximately 3.2%.
(5)
Holdco’s pro forma combined amounts for the three months ended December 31, 2017 reflect (i) the assumption that the entire purchase price will be paid in cash, (ii) an income adjustment of an estimated $25 million pre-tax for depreciation and amortization associated with stepping up the property, plant and equipment and intangibles to their estimated fair values and (iii) an income adjustment of an estimated $27 million pre-tax for interest expense associated with debt expected to be incurred in connection with the transaction at an average interest rate of approximately 3.2%.
(6)
KapStone’s quarter ended December 31, 2017 included a $144.4 million provisional income tax benefit due to the passage of the Tax Act. WestRock’s quarter ended December 31, 2017 included (i) an estimated income tax benefit of  $1,086.9 million as a result of the Tax Act, (ii) a $180.0 million multiemployer pension withdrawal expense and (iii) a $27.6 million pre-cash non-cash impairment of certain mineral rights and real estate in its Land and Development segment.
(7)
KapStone’s pro forma equivalent per share amounts were calculated by multiplying Holdco’s pro forma combined per share amounts by the exchange ratio of 0.4981.
29

COMPARATIVE STOCK PRICES AND DIVIDENDS
WestRock shares and KapStone shares are traded on the NYSE under the symbols WRK and KS, respectively. The following table presents trading information for WestRock shares and KapStone shares on January 26, 2018, the last trading day before the public announcement of the execution of the merger agreement, and [           ], 2018, the latest practicable trading day before the date of this proxy statement/prospectus.
WRK Common Stock
KS Common Stock
Date
High
Low
Close
High
Low
Close
January 26, 2018
$ 71.55 $ 69.16 $ 70.27 $ 27.29 $ 25.56 $ 26.54
[           ], 2018
$ [    ] $ [    ] $ [    ] $ [    ] $ [    ] $ [    ]
For illustrative purposes, the following table provides KapStone equivalent per share information on each of the specified dates. KapStone equivalent per share amounts are calculated by multiplying WestRock per share amounts by the exchange ratio of 0.4981.
WRK Common Stock
KS Equivalent Per Share Data
Date
High
Low
Close
High
Low
Close
January 26, 2018
$ 71.55 $ 69.16 $ 70.27 $ 35.64 $ 34.45 $ 35.00
[           ], 2018
$ [    ] $ [    ] $ [    ] $ [    ] $ [    ] $ [    ]
Market Prices and Dividend Data
The following tables set forth the high and low sales prices of WestRock shares and KapStone shares, and the cash dividends declared per WestRock share and KapStone share, for each of the calendar quarters indicated.
WestRock
High
Low
Dividend
Declared
2015(1)
Quarter ended March 31
$ 71.47 $ 59.35 $ 0.3205
Quarter ended June 30
$ 66.88 $ 59.25 $ 0.3205
Quarter ended September 30
$ 66.40 $ 48.80 $ 0.375
Quarter ended December 31
$ 57.85 $ 42.75 $ 0.375
2016
Quarter ended March 31
$ 45.71 $ 29.73 $ 0.375
Quarter ended June 30
$ 44.49 $ 35.52 $ 0.375
Quarter ended September 30
$ 49.18 $ 36.33 $ 0.375
Quarter ended December 31
$ 53.56 $ 43.79 $ 0.40
2017
Quarter ended March 31
$ 56.12 $ 50.53 $ 0.40
Quarter ended June 30
$ 58.62 $ 49.23 $ 0.40
Quarter ended September 30
$ 60.36 $ 54.05 $ 0.40
Quarter ended December 31
$ 64.87 $ 56.76 $ 0.43
2018
Quarter ended March 31
$ 71.55 $ 60.17 $ 0.43
(1)
From January 1, 2015 through July 1, 2015, the table reflects the market price of RockTenn common stock, which was traded under the symbol “RKT”. See the section entitled “Selected Historical Financial Data of WestRock”, beginning on page 25.
30

KapStone
High
Low
Dividend
Declared
2015
Quarter ended March 31
$ 35.43 $ 28.82 $ 0.10
Quarter ended June 30
$ 32.16 $ 23.12 $ 0.10
Quarter ended September 30
$ 25.00 $ 16.34 $ 0.10
Quarter ended December 31
$ 24.76 $ 17.00 $ 0.10
2016
Quarter ended March 31
$ 22.14 $ 9.05 $ 0.10
Quarter ended June 30
$ 16.92 $ 12.64 $ 0.10
Quarter ended September 30
$ 19.87 $ 12.42 $ 0.10
Quarter ended December 31
$ 22.73 $ 17.66 $ 0.10
2017
Quarter ended March 31
$ 24.80 $ 21.85 $ 0.10
Quarter ended June 30
$ 24.26 $ 19.93 $ 0.10
Quarter ended September 30
$ 23.34 $ 20.90 $ 0.10
Quarter ended December 31
$ 23.12 $ 20.72 $ 0.10
2018
Quarter ended March 31
$ 35.01 $ 22.87 $ 0.10
31

RISK FACTORS
In addition to the other information included and incorporated by reference into this proxy statement/​prospectus, including the matters addressed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements”, beginning on page 40, you should carefully consider the following risks before deciding whether to vote for the proposals described herein. In addition, you should read and consider the risks associated with each of the businesses of WestRock and KapStone because these risks will also affect the combined company. Descriptions of some of these risks can be found in WestRock’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017, WestRock’s Quarterly Reports on Form 10-Q for the three months ended December 31, 2017 and March 31, 2018, KapStone’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and KapStone’s Quarterly Report on Form 10-Q for the three months ended March 31, 2018, as, in each case, updated by any subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, all of which are filed with the SEC and incorporated by reference into this proxy statement/prospectus. You should also read and consider the other information in this proxy statement/​prospectus and the other documents incorporated by reference into this proxy statement/prospectus. See the section entitled “Where You Can Find More Information”, beginning on page 155.
Risks Related to the Mergers
The announcement and pendency of the mergers may adversely affect the business, financial condition and results of operations of WestRock, KapStone and, consequently, the combined company.
Uncertainty about the effect of the mergers on employees, customers, suppliers and other parties may have an adverse effect on each of the respective businesses, financial conditions and results of operations of WestRock and KapStone, regardless of whether the mergers are completed, and may have an adverse effect on the business, financial condition and results of operations of the combined company if the mergers are completed. These risks include the following, all of which could be exacerbated by a delay in the completion of the mergers:

the impairment of WestRock’s and KapStone’s ability to attract, retain and motivate current and prospective employees, including key personnel;

the diversion of significant time and resources of WestRock’s and KapStone’s management;

difficulties maintaining relationships with WestRock’s and KapStone’s customers, suppliers and other business partners;

delays or deferments of certain business decisions by WestRock’s and KapStone’s customers, suppliers and other business partners;

KapStone’s inability to pursue alternative business opportunities or make appropriate changes to KapStone’s business because of requirements in the merger agreement that KapStone use its reasonable best efforts to conduct its business in the ordinary course of business consistent with past practice and not engage in certain activities prior to the completion of the mergers;

any litigation relating to the mergers and the costs related thereto; and

the incurrence of significant costs, expenses and fees for professional services and other transaction costs in connection with the mergers.
Failure to consummate the mergers within the expected timeframe or at all could have a material adverse impact on the business, financial condition and results of operations of WestRock, KapStone and consequently of the combined company.
There can be no assurance that the mergers will occur. Consummation of the mergers is subject to specified conditions, including:

the receipt of the KapStone stockholder approval;

the receipt of the following regulatory approvals: the expiration or termination of the applicable
32

waiting periods (and any extension thereof) under the HSR Act and antitrust notification and approvals required under the Mexican Federal Law of Economic Competition, the Austrian Competition Act and the German Act Against Restraints of Competition;

the absence of any material law or order in effect that prevents, makes illegal or prohibits the consummation of the mergers;

the Registration Statement on Form S-4, of which this proxy statement/prospectus forms a part, being declared effective;

the Holdco shares to be issued with the Holdco stock issuance being authorized for listing on the NYSE, subject to official notice of issuance;

the accuracy of the representations and warranties of the parties and compliance by the parties with their respective obligations under the merger agreement, in each case subject to certain materiality qualifiers; and

the receipt of opinions of counsel regarding the intended tax treatment of the KapStone merger and the WestRock merger.
For additional information regarding the specified conditions to the closing of the mergers, see the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger Agreement — Conditions to the Closing of the Mergers”, beginning on page 129.
We cannot provide any assurances that these conditions will be satisfied in a timely manner or at all or that the mergers will occur.
In addition, the merger agreement contains certain termination rights, including (i) for KapStone and WestRock if the mergers are not consummated on or before October 29, 2018 (which deadline may be extended under certain circumstances to April 29, 2019), (ii) for KapStone and WestRock if KapStone stockholders fail to approve the KapStone merger proposal at the KapStone special meeting, or any adjournment or postponement thereof or (iii) for KapStone, prior to receiving the KapStone stockholder approval, in order to enter into a definitive written agreement providing for a superior proposal after complying with its non-solicitation obligations under the merger agreement, if KapStone pays to WestRock the termination fee under the merger agreement of  $105,600,265. If KapStone is required to make such payment, doing so may materially adversely affect KapStone’s business, financial conditions and liquidity.
In addition, satisfying the conditions to the mergers may take longer, and could cost more, than KapStone and WestRock expect. The occurrence of any of these events individually or in combination may adversely affect the benefits KapStone and WestRock expect to achieve from the mergers and the respective trading prices of KapStone shares and WestRock shares. In addition, if the mergers do not close, the attention of KapStone’s management and WestRock’s management will have been diverted to the consummation of the mergers, rather than their respective operations and pursuit of other opportunities.
The number of Holdco shares that will be received per KapStone share by KapStone stockholders receiving KapStone stock consideration in the KapStone merger is fixed and will not be adjusted in the event of any change in the trading price of either KapStone shares or WestRock shares.
The exchange ratio is fixed in the merger agreement and will not be adjusted for changes in the trading price of either KapStone shares or WestRock shares, which changes may result from a variety of factors (many of which are beyond the control of KapStone and WestRock), including:

changes in KapStone’s and WestRock’s respective businesses, operations and prospects;

changes in market assessments of the business, operations, financial position and prospects of either company or the combined company;

market assessments of the likelihood that the KapStone merger will be completed;

interest rates, general market and economic conditions and other factors generally affecting the trading price of KapStone shares and WestRock shares;
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federal, state and local legislation, governmental regulation and legal developments in the businesses in which KapStone and WestRock operate; and

other factors beyond the control of KapStone and WestRock, including those described in this “Risk Factors” section.
As a result, the implied value of the KapStone stock consideration will fluctuate between now and the completion of the mergers. The value of the KapStone stock consideration depends on the market value of Holdco shares at the time the mergers are completed, which will in turn be affected by the market value of KapStone shares and WestRock shares at the time the mergers are completed.
The merger agreement contains provisions that may discourage other companies from trying to acquire KapStone.
The merger agreement contains provisions that apply both during the pendency of the mergers, as well as afterward should the merger agreement be terminated under certain circumstances, that may discourage a third party from submitting an acquisition proposal to KapStone that might result in greater value to KapStone stockholders than the mergers. These merger agreement provisions include a general prohibition on KapStone from soliciting, or, subject to certain exceptions, entering into discussions with any third party regarding any acquisition proposal or offers for competing transactions during the pendency of the KapStone merger. In addition, WestRock generally has an opportunity to offer to modify the terms and conditions of the merger agreement in response to any acquisition proposals. If the merger agreement is terminated, in certain circumstances, KapStone would be required to pay WestRock a termination fee of $105,600,265 or reimburse WestRock for its expenses incurred in connection with the mergers in an amount up to $17,600,104.
Regulatory approvals may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that cannot be met.
Before the transactions contemplated by the merger agreement, including the KapStone merger, may be completed, various clearances and approvals must be obtained from certain regulatory and governmental authorities as described in “Proposal 1: Adoption of the Merger Agreement — Regulatory Clearances Required for the Mergers”. These regulatory and governmental entities may impose conditions on the granting of such approvals. Such conditions and the process of obtaining regulatory approvals could have the effect of delaying completion of the mergers or of imposing additional costs or limitations on the combined company following the mergers. The regulatory approvals may not be received at all, may not be received in a timely fashion and may contain conditions on the completion of the mergers. However, if any such conditions impose a “burdensome effect” as defined in the merger agreement, the parties may not be obligated to accept or agree to such conditions in order to obtain the regulatory approvals.
Executive officers and directors of KapStone have interests in the mergers that are different from, or in addition to, the interests of KapStone stockholders.
The executive officers and directors of KapStone have certain interests, including financial interests, in the mergers that may be different from, or in addition to, the interests of KapStone stockholders generally. Such interests include the treatment of KapStone equity-based awards held by executive officers and directors, as well as payments and benefits to which certain executive officers may become entitled under certain change in control severance agreements and success and/or retention bonus arrangements, in each case in connection with the mergers. The KapStone board was aware of these interests and considered them, among other matters, in approving the merger agreement and the transactions contemplated thereby, and in making the KapStone recommendation. For additional information, see the section entitled “Proposal 1: Adoption of the Merger Agreement — Financial Interests of KapStone Directors and Officers in the Mergers”, beginning on page 76.
If a KapStone stockholder makes a stock election with respect to any KapStone shares, it may not receive the KapStone stock consideration in respect of such stock election shares.
Although each KapStone stockholder may elect to receive, in connection with the KapStone merger, the KapStone stock consideration, stock elections are subject to proration procedures that are designed to ensure that the KapStone stock consideration is received in respect of no more than 25% of the KapStone
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shares issued and outstanding immediately prior to the effective time. Accordingly, depending on the stock elections made by other KapStone stockholders, if a KapStone stockholder makes a stock election, such holder may not receive the KapStone stock consideration in respect of such stock election shares. The greater the oversubscription of the stock election, the fewer Holdco shares and more cash a KapStone stockholder making a stock election will receive in respect of its stock election shares. See the section entitled “Proposal 1: Adoption of the Merger Agreement — The Merger Agreement — Proration Procedures”, beginning on page 102, for more information. If a KapStone stockholder makes no stock election with respect to any of its KapStone shares or the exchange agent does not receive a properly completed and signed election form by the election deadline and such stockholder does not properly demand appraisal in accordance with the DGCL, it will receive the KapStone cash consideration in respect of such shares. In addition, no fractional Holdco shares will be issued in the KapStone merger, and KapStone stockholders will receive cash in lieu of any such fractional Holdco shares.
Holders of the Holdco shares to be received by KapStone stockholders upon completion of the KapStone merger will have different rights than holders of KapStone shares.
Upon completion of the KapStone merger, KapStone stockholders receiving the KapStone stock consideration will become Holdco stockholders, and their rights will continue to be governed by Delaware law, including the DGCL, and will be governed by the certificate of incorporation and bylaws of Holdco that will be in effect immediately following the mergers (referred to as the Holdco charter and Holdco bylaws, respectively). The rights associated with KapStone shares are different from the rights associated with Holdco shares. See the section entitled “Comparison of Rights of Holdco Stockholders and KapStone Stockholders”, beginning on page 143.
If the KapStone merger, when taken together with the WestRock merger, does not qualify as a transaction described in Section 351 of the Code, KapStone stockholders receiving Holdco shares in the KapStone merger may be required to pay substantial incremental U.S. federal income taxes.
As a condition to the completion of the KapStone merger, Sidley, tax counsel to KapStone, or another nationally recognized law firm, must have delivered an opinion, dated as of the effective time, to the effect that the KapStone merger, when taken together with the WestRock merger, should be treated as a transaction described in Section 351 of the Code. The opinion will assume that the mergers will be completed according to the terms of the merger agreement and that the parties will report the transactions in a manner consistent with the opinion. The opinion will rely on the facts as stated in the merger agreement, the Registration Statement on Form S-4 of which this proxy statement/prospectus forms a part and certain other documents. In rendering the tax opinion, Sidley (or another nationally recognized law firm) will require and rely on representations of KapStone and WestRock to be delivered at the time of closing (and will assume that any such representation that is qualified by belief, knowledge or materiality is true, correct and complete without such qualification). If any such assumption or representation is or becomes inaccurate, the U.S. federal income tax consequences of the KapStone merger could be adversely affected. The opinion will be based on statutory, regulatory and judicial authority existing as of the date of the opinion, any of which may be changed at any time with retroactive effect. An opinion of counsel represents counsel’s best legal judgment but is not binding on the Internal Revenue Service (referred to as the IRS) or on any court. KapStone does not intend to request any ruling from the IRS as to the U.S. federal income tax consequences of the KapStone merger. Consequently, no assurance can be given that the IRS will not assert, or that a court will not sustain, a position contrary to any of the tax consequences set forth in this proxy statement/prospectus or any of the tax consequences described in the tax opinion. If the IRS were to be successful in any such contention, or if for any other reason the KapStone merger, when taken together with the WestRock merger, were not treated as a transaction described in Section 351 of the Code, then none of the KapStone stockholders would be entitled to defer any portion of the gain realized as a result of receiving Holdco shares in the KapStone merger. Rather, all KapStone stockholders would recognize gain or loss with respect to all such KapStone shares based on the difference between (A) that stockholder’s tax basis in such KapStone shares and (B) the aggregate cash and the fair market value of the Holdco shares received. For additional information regarding the U.S. federal income tax consequences to U.S. holders of KapStone shares, see the section entitled “Proposal 1: Adoption of the Merger Agreement — Material U.S. Federal Income Tax Consequences of the Mergers to U.S. Holders of KapStone Shares”, beginning on page 83.
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KapStone stockholders will have a reduced ownership and voting interest after the mergers and will exercise less influence over management.
KapStone stockholders currently have the right to vote for their directors and on other matters affecting KapStone. When the mergers occur, the Holdco shares that each KapStone stockholder receives in exchange as KapStone stock consideration will represent a percentage ownership of Holdco that is significantly smaller than the KapStone stockholder’s percentage ownership of KapStone. Stock elections are subject to proration procedures that are designed to ensure that the KapStone stock consideration is received in respect of no more than 25% of the KapStone shares issued and outstanding immediately prior to the effective time. If the mergers are completed and the maximum stock amount is issued to KapStone stockholders, assuming 100.3 million KapStone shares are issued and outstanding immediately prior to the effective time and 256.5 million WestRock shares are issued and outstanding immediately prior to the effective time, approximately 4.6% of the issued and outstanding Holdco shares immediately following the effective time of the mergers will be held by former KapStone stockholders. As a result of these reduced ownership percentages, former KapStone stockholders will have less influence on the management and policies of Holdco than they now have with respect to KapStone.
The opinions of KapStone’s financial advisors will not be updated to reflect changes in circumstances between signing of the merger agreement in January 2018 and the completion of the mergers.
KapStone has not obtained updated opinions from its financial advisors as of the date of this proxy statement/prospectus, and KapStone does not anticipate asking its financial advisors to update their opinions. Changes in the operations and prospects of KapStone or WestRock, general market and economic conditions and other factors that may be beyond the control of KapStone or WestRock, and on which KapStone’s financial advisors’ opinions were based, may significantly alter the trading prices of KapStone shares or WestRock shares by the time the mergers are completed. The opinions do not speak as of the time the mergers will be completed or as of any date other than the date on which such opinions were delivered. Because KapStone’s financial advisors will not be updating their opinions, which were issued in connection with the signing of the merger agreement on January 28, 2018, the opinions will not address the fairness of the KapStone merger consideration from a financial point of view at the time the mergers are completed. For a description of the opinions that KapStone received from its financial advisors, see the section entitled “Proposal 1: Adoption of the Merger Agreement  — Opinions of KapStone’s Financial Advisors”, beginning on page 63.
Risks Related to the Business of the Combined Company upon Completion of the Mergers
The following risks are only applicable to the extent that KapStone stockholders receive KapStone stock consideration in connection with the mergers.
The combined company may fail to realize the anticipated benefits of the mergers.
The success of the mergers will depend on, among other things, the combined company’s ability to combine the KapStone and WestRock businesses in a manner that facilitates growth opportunities and realizes anticipated cost synergies and performance improvements.
However, the combined company must successfully combine the businesses of KapStone and WestRock in a manner that permits these anticipated cost synergies and performance improvements to be realized. In addition, the combined company must achieve the anticipated synergies and improvements without adversely affecting current revenues and investments in future growth. If the combined company is not able to successfully achieve these objectives, the anticipated benefits of the mergers may not be realized fully or at all or may take longer to realize than expected.
The failure to integrate successfully certain businesses and operations of KapStone and WestRock in the expected time frame may adversely affect the combined company’s future results.
Historically, KapStone and WestRock have operated as independent companies, and they will continue to do so until the completion of the mergers. The management of the combined company may face significant challenges in integrating and consolidating certain businesses and the functions of KapStone and WestRock, integrating their technologies, organizations, procedures, policies and operations, addressing
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differences in the business cultures of the two companies and retaining key personnel. The integration may also be complex and time consuming, and require substantial resources and effort. The integration process and other disruptions resulting from the mergers may also disrupt KapStone’s and WestRock’s ongoing businesses or cause inconsistencies in standards, controls, procedures and policies that adversely affect the combined company’s relationships with employees, suppliers, customers and others with whom KapStone and WestRock have business or other dealings or limit the combined company’s ability to achieve the anticipated benefits of the mergers. In addition, difficulties in integrating the businesses or regulatory functions of KapStone and WestRock could harm the reputation of the combined company.
Combining the businesses of KapStone and WestRock may be more difficult, costly or time-consuming than expected, which may adversely affect the combined company’s results and negatively affect the value of Holdco shares following the mergers.
KapStone and WestRock have entered into the merger agreement because each believes that the mergers will be beneficial to its respective company and stockholders, and that combining the businesses of KapStone and WestRock will produce cost synergies and performance improvements. If the combined company is not able to successfully combine the businesses of KapStone and WestRock in an efficient, effective and timely manner, the anticipated synergies and improvements of the mergers may not be realized fully, or at all, or may take longer to realize than expected, and the value of Holdco shares may be affected adversely.
An inability to realize the full extent of the anticipated benefits of the mergers and the other transactions contemplated by the merger agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, level of expenses and operating results of the combined company, which may adversely affect the value of Holdco shares after the completion of the mergers.
In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized. Actual synergies, if achieved, may be lower than what WestRock and Holdco expect and may take longer to achieve than anticipated. If the combined company is not able to adequately address integration challenges, the combined company may be unable to successfully integrate KapStone’s and WestRock’s operations or to realize the anticipated benefits of the integration of the two companies.
KapStone and WestRock will incur significant transaction costs in connection with the mergers.
KapStone and WestRock have incurred and expect to incur a number of non-recurring costs associated with the mergers. These costs and expenses include financial advisory, legal, accounting, consulting and other advisory fees and expenses, reorganization and restructuring costs, severance and employee benefit-related expenses, filing fees, printing expenses and other related charges. Some of these costs are payable by KapStone and WestRock regardless of whether the mergers are completed. There is also a large number of processes, policies, procedures, operations, technologies and systems that must be integrated in connection with the mergers. While both KapStone and WestRock have assumed that a certain level of expenses would be incurred in connection with the mergers and the other transactions contemplated by the merger agreement, there are many factors beyond their control that could affect the total amount or the timing of the integration and implementation expenses.
There may also be additional unanticipated significant costs in connection with the mergers that the combined company may not recoup. These costs and expenses could reduce the benefits and additional income Holdco expects to achieve from the mergers. Although Holdco expects that these benefits will offset the transaction expenses and implementation costs over time, this expected net benefit may not be achieved in the near term or at all.
The combined company expects to have additional indebtedness following the mergers and the credit ratings of the combined company or its subsidiaries may be different from current ratings and what WestRock and KapStone currently expect.
WestRock expects to incur additional indebtedness in order to finance the KapStone cash consideration and pay other costs and expenses incurred in connection with the mergers and related
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transactions. The receipt of financing by WestRock or its affiliates, however, is not a condition to completion of the mergers. Following completion of the mergers, the combined company will have substantial indebtedness and the credit ratings of the combined company and its subsidiaries may be different from current WestRock or KapStone ratings and what WestRock and KapStone currently expect. Any new indebtedness may adversely affect the business, financial condition and operating results of the combined company, including:

making it more difficult for the combined company to satisfy its debt service obligations;

requiring the combined company to dedicate a substantial portion of its cash flows to debt service obligations, thereby potentially reducing the availability of cash flows to pay cash dividends and to fund working capital, capital expenditures, acquisitions, investments and other general operating requirements;

limiting the ability of the combined company to obtain additional financing to fund its working capital requirements, capital expenditures, acquisitions, investments, debt service obligations and other general operating requirements;

restricting the combined company from making strategic acquisitions or taking advantage of favorable business opportunities;

placing the combined company at a relative competitive disadvantage compared to competitors that have less debt;

limiting flexibility to plan for, or react to, changes in the businesses and industries in which the combined company operates, which may adversely affect the combined company’s operating results and ability to meet its debt service obligations;

increasing the vulnerability of the combined company to adverse general economic and industry conditions, including changes in interest rates; and

limiting the ability of the combined company to refinance its indebtedness or increasing the cost of such indebtedness.
If Holdco incurs additional indebtedness following the mergers, the risks related to the substantial indebtedness of Holdco may intensify.
Third parties may terminate or alter existing contracts or relationships with WestRock or KapStone.
Each of WestRock and KapStone has contracts with customers, suppliers, vendors, landlords, licensors and other business partners which may require WestRock or KapStone, as applicable, to obtain consent from these other parties in connection with the mergers. If these consents cannot be obtained, the combined company may suffer a loss of potential future revenue and may lose rights that are material to its business. In addition, third parties with which WestRock or KapStone currently have relationships may terminate or otherwise reduce the scope of their relationships with either or both parties in anticipation of the mergers, or with the combined company following the mergers. Any such disruptions could limit the combined company’s ability to achieve the anticipated benefits of the mergers. The adverse effect of such disruptions could also be exacerbated by a delay in the completion of the mergers or the termination of the merger agreement.
Risks Related to KapStone’s Business
You should read and consider risk factors specific to KapStone’s businesses that will also affect the combined company after the completion of the mergers. These risks are described in Part I, Item 1A of KapStone’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, in Part II, Item 1A of KapStone’s Quarterly Report on Form 10-Q for the three months ended March 31, 2018, and in other documents that are incorporated by reference into this document. See the section entitled “Where You Can Find More Information”, beginning on page 155, for the location of information incorporated by reference in this proxy statement/prospectus.
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Risks Related to WestRock’s Business
You should read and consider risk factors specific to WestRock’s businesses that will also affect the combined company after the completion of the mergers. These risks are described in Part I, Item 1A of WestRock’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017, in Part II, Item 1A of WestRock’s Quarterly Reports on Form 10-Q for the three months ended December 31, 2017 and March 31, 2018, and in other documents that are incorporated by reference into this document. See the section entitled “Where You Can Find More Information”, beginning on page 155, for the location of information incorporated by reference in this proxy statement/prospectus.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Any statements in this proxy statement/prospectus about KapStone’s, WestRock’s or Holdco’s expectations, beliefs, plans or forecasts, including statements regarding the mergers, the expected timetable for completing the mergers, benefits and synergies of the mergers and future opportunities for the combined company and products and services, that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by words or phrases such as “may”, “will”, “could”, “should”, “would”, “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, “target”, “prospects”, “potential” and “forecast”, and other words, terms and phrases of similar meaning. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. KapStone, WestRock and Holdco caution readers that any forward-looking statement is not a guarantee of future performance, and that actual results could differ materially from those contained in the forward-looking statement. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking statements are the following: the parties’ ability to consummate the mergers; the satisfaction of the conditions to the completion of the mergers, including the receipt of the KapStone stockholder approval; the regulatory approvals required for the mergers may not be obtained on the terms expected or on the anticipated schedule (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the mergers); the parties’ ability to meet expectations regarding the timing, completion and accounting and tax treatments of the mergers; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies within the expected time-frames or at all and to successfully integrate KapStone’s operations with those of WestRock; such integration may be more difficult, time-consuming or costly than expected; operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) may be greater than expected following the mergers; WestRock and KapStone are subject to intense competition and increased competition is expected in the future; fluctuations in foreign currencies could result in losses and increased expenses relating to the mergers; risks relating to the value of the Holdco shares that may be issued in the mergers; the ability of KapStone and the combined company to retain and hire key personnel; and general economic conditions that are less favorable than expected. Such risks and other factors that may impact management’s assumptions are more particularly described in KapStone’s and WestRock’s filings with the SEC, including under the caption “Risk Factors” in KapStone’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, “Risk Factors” in KapStone’s Quarterly Report on Form 10-Q for the three months ended March 31, 2018, “Business — Forward-Looking Information” and “Risk Factors” in WestRock’s Annual Report on Form 10-K for the fiscal year ended September 30, 2017 and “Forward-Looking Statements” and “Risk Factors” in WestRock’s Quarterly Reports on Form 10-Q for the three months ended December 31, 2017 and March 31, 2018. The information contained herein speaks as of the date hereof and none of KapStone, WestRock or Holdco have or undertake any obligation to update or revise their forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
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THE COMPANIES
WestRock Company
WestRock Company
1000 Abernathy Road NE
Atlanta, GA 30328
Telephone: (770) 448-2193
WestRock Company, a Delaware corporation, is a multinational provider of paper and packaging solutions for consumer and corrugated packaging markets. WestRock partners with its customers to provide differentiated paper and packaging solutions that help them win in the marketplace. WestRock’s 45,000 team members support customers around the world from more than 300 operating and business locations spanning North America, South America, Europe, Asia and Australia.
WestRock shares are listed on the NYSE under the symbol “WRK”.
Additional information about WestRock and its subsidiaries is included in documents incorporated by reference in this proxy statement/prospectus. See the section entitled “Where You Can Find More Information”, beginning on page 155.
KapStone Paper and Packaging Corporation
KapStone Paper and Packaging Corporation
1101 Skokie Boulevard, Suite 300
Northbrook, IL 60062
Telephone: (847) 239-8800
KapStone Paper and Packaging Corporation, founded in 2005 and headquartered in Northbrook, Illinois, is the fifth largest producer of containerboard the largest producer of kraft paper in North America, based on production capacity. KapStone conducts its operations in two segments: (i) Paper and Packaging, which manufactures and sells a wide variety of containerboard, corrugated products and specialty paper for industrial and consumer markets and (ii) Distribution, through Victory Packaging, L.P., a packaging solutions distribution company with facilities in the United States, Canada and Mexico. KapStone operates four containerboard mills, 23 corrugated products manufacturing plants and 60 distribution centers and employs approximately 6,400 employees.
KapStone shares are listed on the NYSE under the symbol “KS”.
Additional information about KapStone and its subsidiaries is included in documents incorporated by reference in this proxy statement/prospectus. See the section entitled “Where You Can Find More Information”, beginning on page 155.
Whiskey Holdco, Inc.
Whiskey Holdco, Inc.
c/o WestRock Company
1000 Abernathy Road NE
Atlanta, GA 30328
Telephone: (770) 448-2193
Whiskey Holdco, Inc., a wholly owned subsidiary of WestRock, is a Delaware corporation that was incorporated on January 25, 2018 for the purpose of effecting the mergers. To date, Holdco has not conducted any activities other than those incidental to its incorporation and the matters contemplated by the merger agreement in connection with the mergers. Pursuant to the merger agreement, immediately prior to the completion of the mergers, the name of Holdco will be changed to “WestRock Company” and the name of the surviving company in the WestRock merger will be changed to a name to be determined by WestRock. As of the completion of the mergers, WestRock and KapStone will each become a wholly owned subsidiary of Holdco and it is expected that the Holdco shares will be listed on the NYSE under the symbol “WRK”. The business of Holdco will be the combined businesses currently conducted by WestRock and KapStone.
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Whiskey Merger Sub, Inc.
Whiskey Merger Sub, Inc.
c/o WestRock Company
1000 Abernathy Road NE
Atlanta, GA 30328
Telephone: (770) 448-2193
Whiskey Merger Sub, Inc., a wholly owned subsidiary of Holdco, is a Delaware corporation that was incorporated on January 25, 2018 for the purpose of effecting the WestRock merger. To date, WestRock Merger Sub has not conducted any activities other than those incidental to its formation and the matters contemplated by the merger agreement in connection with the mergers. Pursuant to the merger agreement, WestRock Merger Sub will be merged with and into WestRock, with WestRock surviving the WestRock merger as a wholly owned subsidiary of Holdco.
Kola Merger Sub, Inc.
Kola Merger Sub, Inc.
c/o WestRock Company
1000 Abernathy Road NE
Atlanta, GA 30328
Telephone: (770) 448-2193
Kola Merger Sub, Inc., a wholly owned subsidiary of Holdco, is a Delaware corporation that was incorporated on January 25, 2018 for the purpose of effecting the KapStone merger. To date, KapStone Merger Sub has not conducted any activities other than those incidental to its formation and the matters contemplated by the merger agreement in connection with the mergers. Pursuant to the merger agreement, KapStone Merger Sub will be merged with and into KapStone, with KapStone surviving the KapStone merger as a wholly owned subsidiary of Holdco.
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THE KAPSTONE SPECIAL MEETING
Date, Time and Place
The KapStone special meeting is scheduled to be held at KapStone Corporate Headquarters, 1101 Skokie Boulevard, Suite 300, Northbrook, Illinois 60062, on [           ], 2018 at [    ] local time.
Purpose of the KapStone Special Meeting
At the KapStone special meeting, KapStone stockholders will be asked:

to consider and vote on the KapStone merger proposal;

to consider and vote on the KapStone adjournment proposal; and

to consider and vote on the KapStone compensation proposal.
Recommendation of the Board of Directors of KapStone
After careful consideration, the KapStone board, on January 28, 2018, unanimously approved and adopted the merger agreement and the transactions contemplated thereby, on the terms and subject to the conditions set forth therein, including the KapStone merger, determined that the terms of the merger agreement are in the best interests of KapStone and its stockholders, declared the merger agreement advisable and further resolved to make the KapStone recommendation and recommend that KapStone stockholders approve the KapStone compensation proposal.
The KapStone board unanimously recommends that KapStone stockholders vote “FOR” each of the KapStone merger proposal, the KapStone adjournment proposal and the KapStone compensation proposal.
KapStone Record Date; Stockholders Entitled to Vote
Only holders of record of KapStone shares at the close of business on the record date will be entitled to notice of, and to vote at, the KapStone special meeting or any adjournments or postponements thereof. A list of stockholders of record entitled to vote at the KapStone special meeting will be available at the executive offices of KapStone at 1101 Skokie Boulevard, Suite 300, Northbrook, Illinois 60062 and will also be available for inspection at the KapStone special meeting.
As of the close of business on the record date, there were issued and outstanding a total of  [    ] KapStone shares entitled to vote at the KapStone special meeting. As of the close of business on the record date, approximately [    ]% of the issued and outstanding KapStone shares were held by KapStone directors, executive officers and their affiliates.
KapStone currently expects that its directors and executive officers will vote their KapStone shares in favor of the KapStone merger proposal, the KapStone adjournment proposal and the KapStone compensation proposal. Concurrently with the execution of the merger agreement on January 28, 2018, as inducement for WestRock to enter into the merger agreement, WestRock entered into separate voting agreements with Roger W. Stone, Executive Chairman of the KapStone board, and certain affiliated entities, which together owned shares totaling approximately 5.9% of the KapStone shares issued and outstanding as of January 28, 2018, and with Matthew Kaplan, KapStone’s President and Chief Executive Officer, who owned shares totaling approximately 3.6% of the KapStone shares issued and outstanding as of January 28, 2018. Each of Messrs. Stone and Kaplan agreed during the term of his respective voting agreement to, among other things, upon the terms and subject to the conditions therein, (i) vote all the KapStone shares that he beneficially owns in favor of the adoption of the merger agreement and against any alternative transaction that may be proposed, (ii) not solicit alternative transactions or participate in discussions or negotiations regarding alternative transactions, in each case, subject to certain exceptions, and (iii) subject to certain exceptions, will not sell or otherwise transfer his KapStone shares.
Quorum
A quorum is necessary to transact business at the KapStone special meeting. A quorum for action on any subject matter at any special meeting of KapStone stockholders will exist when the holders of a majority of the issued and outstanding KapStone shares entitled to vote on such subject matter are
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represented in person or by proxy at such meeting. KapStone shares represented at the KapStone special meeting but not voted, including KapStone shares for which a stockholder directs an “abstention” from voting, will be counted as present for purposes of establishing a quorum. Broker non-votes, if any, will not be counted as present for purposes of establishing a quorum. KapStone shares owned by KapStone as treasury shares will not be included in the calculation of the number of KapStone shares represented at the KapStone special meeting for purposes of determining whether a quorum is present.
Required Vote
Completion of the mergers is conditioned on the KapStone stockholder approval. Assuming a quorum is present, the KapStone stockholder approval requires the affirmative vote of holders of a majority of the KapStone shares issued and outstanding and entitled to vote on the KapStone merger proposal. Assuming a quorum is present, approval of the KapStone adjournment proposal requires the affirmative vote of holders of a majority of the KapStone shares present in person or represented by proxy at the KapStone special meeting and entitled to vote on the adjournment proposal. Assuming a quorum is present, approval of the KapStone compensation proposal requires the affirmative vote of holders of a majority of the KapStone shares present in person or represented by proxy at the KapStone special meeting and entitled to vote on the KapStone compensation proposal.
Abstentions and Broker Non-Votes
If you are a KapStone stockholder and fail to vote, fail to instruct your broker or nominee to vote, or vote to abstain, it will have the effect of a vote “AGAINST” the KapStone merger proposal. If you are a KapStone stockholder and fail to vote or fail to instruct your broker or nominee to vote, it will have no effect on the KapStone adjournment proposal or the KapStone compensation proposal, assuming a quorum is present. If you are a KapStone stockholder and you mark your proxy card or voting instructions to abstain, it will have the effect of a vote “AGAINST” the KapStone adjournment proposal and the KapStone compensation proposal.
Voting in Person
If you plan to attend the KapStone special meeting and wish to vote in person, you will be given a ballot at the KapStone special meeting. If your KapStone shares are held in “street name”, and you wish to vote your KapStone shares in person at the KapStone special meeting, you must bring to the KapStone special meeting a “legal proxy” executed in your favor from the record holder (your broker, bank, trust company or other nominee) of the KapStone shares authorizing you to vote at the KapStone special meeting.
In addition, you may be asked to present valid photo identification, such as a driver’s license or passport, before being admitted to the KapStone special meeting. If you hold your KapStone shares in “street name”, you also may be asked to present proof of ownership to be admitted to the KapStone special meeting. A brokerage statement or letter from your broker, bank, trust company or other nominee proving ownership of the KapStone shares on the record date are examples of proof of ownership. KapStone stockholders will not be allowed to use cameras, recording devices and other similar electronic devices at the KapStone special meeting.
Voting of Proxies
A proxy card is enclosed for your use. KapStone requests that you mark, sign and date the accompanying proxy card and return it in the enclosed postage-paid envelope so that it is received by the Corporate Secretary of KapStone prior to the KapStone special meeting or authorize the individuals named on your proxy card to vote your shares by calling the toll-free telephone number or by logging on to the Internet website specified in the instructions included with your proxy card by 11:59 p.m. New York City time on the day preceding the KapStone special meeting. When the accompanying proxy card is returned properly executed, the KapStone shares represented by it will be voted at the KapStone special meeting or any adjournment thereof in accordance with the instructions contained in the proxy card.
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If a signed proxy card is returned without an indication as to how the KapStone shares represented are to be voted with regard to a particular proposal, the KapStone shares represented by the proxy will be voted “FOR” each such proposal.
At the date hereof, management has no knowledge of any business that will be presented for consideration at the KapStone special meeting and which would be required to be set forth in this proxy statement/prospectus or the related KapStone proxy card other than the matters set forth in KapStone’s Notice of Special Meeting of Stockholders. If any other matter is properly presented at the KapStone special meeting for consideration, the enclosed proxies will confer discretionary authority on the individuals named in the proxies to vote the KapStone shares represented by the proxies as to any other matters. The individuals named as proxies intend to vote in accordance with their best judgment as to any other matters.
Your vote is important. Accordingly, please mark, sign, date and return the enclosed proxy card whether or not you plan to attend the KapStone special meeting in person.
How Proxies Are Counted
All KapStone shares represented by properly executed proxies received in time for the KapStone special meeting will be voted at the KapStone special meeting in the manner specified by the KapStone stockholder giving those proxies. Properly executed proxies that do not contain voting instructions with respect to the KapStone merger proposal, the KapStone adjournment proposal or the KapStone compensation proposal will be voted as recommended by the KapStone board, which is a vote “FOR” each such proposal.
Voting of KapStone Shares Held in “Street Name”
If you hold KapStone shares through a broker or other nominee, you may instruct your broker or other nominee to vote your KapStone shares by following the instructions that the broker or nominee provides to you with these materials. Most brokers offer the ability for stockholders to submit voting instructions by mail by completing a voting instruction card, by telephone and via the Internet. Broker non-votes, if any, will not be counted as present for purposes of establishing a quorum. Broker non-votes will have the effect of a vote “AGAINST” the KapStone merger proposal. Broker non-votes will have no effect on the KapStone adjournment proposal or the KapStone compensation proposal. If your KapStone shares are held in “street name”, and you wish to vote your KapStone shares in person at the KapStone special meeting, you must bring to the KapStone special meeting a “legal proxy” executed in your favor from the record holder (your broker, bank, trust company or other nominee) of the KapStone shares authorizing you to vote at the KapStone special meeting.
Revocability of Proxies and Changes to a KapStone Stockholder’s Vote
You may change your vote at any time before your proxy is voted at the KapStone special meeting. You may do this in one of four ways:

by sending a notice of revocation to the Corporate Secretary of KapStone, dated as of a later date than the date of the proxy card and received by the Corporate Secretary of KapStone prior to the KapStone special meeting;

by sending a completed proxy card bearing a later date than your original proxy card and mailing it so that it is received by the Corporate Secretary of KapStone prior to the KapStone special meeting;

by logging on to the Internet website specified on your proxy card in the same manner you would to submit your proxy electronically or by calling the telephone number specified on your proxy card, in each case if you are eligible to do so and following the instructions on the proxy card and by 11:59 p.m. New York City time on the day preceding the KapStone special meeting; or

by attending the KapStone special meeting and voting in person.
Your attendance alone will not revoke any proxy.
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Written notices of revocation and other communications about revoking KapStone proxies should be addressed to:
KapStone Paper and Packaging Corporation
1101 Skokie Boulevard, Suite 300
Northbrook, IL 60062
Attn: Kathryn D. Ingraham, Vice President, Secretary and General Counsel
If your KapStone shares are held in “street name”, you should follow the instructions of your broker regarding the revocation of proxies.
Once voting on a particular matter is completed at the KapStone special meeting, a KapStone stockholder will not be able to revoke its proxy or change its vote as to that matter.
All KapStone shares represented by valid proxies that KapStone receives through this solicitation and that are not revoked will be voted in accordance with the instructions on the proxy card. If a KapStone stockholder makes no specifications on its proxy card as to how it should want its KapStone shares voted before signing and returning it, such proxy will be voted as recommended by the KapStone board, which is “FOR” the KapStone merger proposal, “FOR” the KapStone adjournment proposal and “FOR” the KapStone compensation proposal.
Tabulation of Votes
The KapStone board has appointed a representative of Morrow Sodali LLC to serve as the inspector of election for the KapStone special meeting. The inspector of election will, among other matters, determine the number of KapStone shares represented at the KapStone special meeting to confirm the existence of a quorum, determine the validity of all proxies and ballots and certify the results of voting on all proposals submitted to the KapStone stockholders.
Solicitation of Proxies
KapStone will bear the entire cost of soliciting proxies from its stockholders, except that KapStone and WestRock have agreed to each pay one half of the costs and expenses of printing and mailing this proxy statement/prospectus and all filing and other similar fees payable to the SEC in connection with this proxy statement/prospectus. In addition to the solicitation of proxies by mail, KapStone will request that banks, brokers and other record holders send proxies and proxy material to the beneficial owners of KapStone shares and secure their voting instructions, if necessary. KapStone will reimburse the record holders for their reasonable expenses in taking those actions.
KapStone has also made arrangements with Morrow Sodali LLC to assist in soliciting proxies and in communicating with KapStone stockholders. KapStone will pay Morrow Sodali LLC a fee of  $10,000, $5,000 of which, and an advance against disbursements in the amount of  $7,500 will be paid prior to the conclusion of the solicitation, with the remaining balance to become payable upon the conclusion of the solicitation. KapStone will also pay Morrow Sodali LLC a fee of  $2,500, plus related travel expenses, for providing inspector services at the KapStone special meeting. If necessary, KapStone may also use several of its employees, who will not be specially compensated, to solicit proxies from KapStone stockholders, either personally or by telephone, the Internet, facsimile or letter.
Adjournments
If a quorum is not present or represented, a meeting of KapStone stockholders may be adjourned for such periods as the presiding officer of the meeting or the stockholders holding a majority of the issued and outstanding KapStone shares present in person or by proxy at the KapStone special meeting and entitled to vote on the adjournment proposal shall direct. If a quorum is present at the KapStone special meeting but there are not sufficient votes at the time of the KapStone special meeting to approve the KapStone merger proposal, then KapStone stockholders may be asked to vote on the KapStone adjournment proposal. Notice need not be given of the adjourned meeting if the date, hour and place thereof are announced at the meeting at which the adjournment is taken, unless the KapStone board sets a new record date for such meeting, in which case a notice of the adjourned meeting will be given to each holder of record of
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KapStone shares entitled to vote at the meeting. At any subsequent reconvening of the KapStone special meeting at which a quorum is present, any business may be transacted that might have been transacted at the original meeting and all proxies will be voted in the same manner as they would have been voted at the original convening of the KapStone special meeting, except for any proxies that have been effectively revoked or withdrawn prior to the time the proxy is voted at the reconvened meeting.
Assistance
If you need assistance in completing your proxy card or have questions regarding the KapStone special meeting, please contact Morrow Sodali LLC, the proxy solicitation agent for KapStone, at 470 West Avenue, Stamford, CT 06902. KapStone stockholders may call toll-free at (800) 662-5200. Banks and brokerage firms may call (203) 658-9400.
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PROPOSAL 1:
ADOPTION OF THE MERGER AGREEMENT
Effects of the Mergers
At the effective time, WestRock Merger Sub will be merged with and into WestRock, with WestRock surviving the WestRock merger as a wholly owned subsidiary of Holdco (referred to as the WestRock surviving company), and immediately following the WestRock merger, KapStone Merger Sub will be merged with and into KapStone, with KapStone surviving the KapStone merger as a wholly owned subsidiary of Holdco (referred to as the KapStone surviving company). As a result, among other things, Holdco will become the ultimate parent of WestRock, KapStone and their respective subsidiaries. Subject to the terms and conditions set forth in the merger agreement, KapStone stockholders will have the right to elect to receive with respect to each KapStone share they hold (other than KapStone shares in respect of which a KapStone stockholder has properly demanded appraisal rights in accordance with the DGCL), subject to certain proration procedures described below, either: (1) $35.00 in cash, without interest thereon, or (2) 0.4981 Holdco shares, with cash paid in lieu of fractional Holdco shares. At the effective time, and without any action on the part of WestRock, Holdco, the WestRock surviving company or the holders of WestRock shares, Holdco shares or capital stock of the WestRock surviving company, each issued and outstanding WestRock share will be converted into one Holdco share.
Under the merger agreement, the maximum stock amount, which is the maximum number of Holdco shares that may be issued as stock consideration, is equal to (i) 25% of the product of  (A) 0.4981 and (B) the number of issued and outstanding KapStone shares immediately prior to the effective time, (ii) rounded down to the nearest whole number. Therefore, stock elections are subject to proration procedures. See the sections entitled “— The Merger Agreement — Proration Procedures”, beginning on page 102, and “— The Merger Agreement — Election Procedures”, beginning on page 102.
The table below demonstrates the potential effects of the proration procedures on what a hypothetical holder of 100 KapStone shares would receive if such holder elected to receive the KapStone stock consideration for all of its KapStone shares.
Aggregate Stock Election Shares as a Percentage of
Outstanding KapStone Shares
Before Proration
After Proration
Stock Electing
Shares
Cash Electing
Shares
KapStone Stock
Consideration
(Holdco shares)(1)
KapStone Cash
Consideration(2)
95%
100 0 13 $ 2,578.95
80%
100 0 15 $ 2,406.25
65%
100 0 19 $ 2,153.85
50%
100 0 24 $ 1,750.00
35%
100 0 35 $ 1,000.00
25%
100 0 49 $ 0.00
20%
100 0 49 $ 0.00
(1)
Cash will be paid in lieu of fractional Holdco shares.
(2)
Cash values provided exclude the cash value of fractional Holdco shares.
The merger agreement does not contain any provision that would adjust the exchange ratio based on fluctuations in the market value of either KapStone shares or WestRock shares. Because of this, the implied value of the KapStone stock consideration will fluctuate between now and the completion of the mergers. The value of the KapStone stock consideration depends on the market value of Holdco shares at the time the mergers are completed, which will in turn be affected by the market value of KapStone shares and WestRock shares at the time the mergers are completed.
Background of the Mergers
From time to time, the KapStone board, in consultation with senior management of KapStone and KapStone’s advisors, has reviewed KapStone’s strategic alternatives, including acquisitions, dispositions and
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potential strategic combinations with parties operating in KapStone’s same or a similar industry. On January 21, 2016, an industry participant (referred to as Party A) indicated to Mr. Matthew Kaplan, KapStone’s current President and Chief Executive Officer, and Mr. Roger Stone, the current Executive Chairman of the KapStone board, a desire to enter into discussions regarding a potential business combination with KapStone. In February of 2016, Mr. Kaplan met with representatives of Party A. KapStone and Party A entered into a non-disclosure and standstill agreement on March 29, 2016 and engaged in intermittent discussions throughout March and April of 2016. On April 20, 2016, representatives of Party A orally communicated to Mr. Kaplan an offer for KapStone of less than $18.00 per KapStone share. Over the next several months, Mr. Kaplan and representatives of Party A engaged in intermittent discussions. In the first half of 2017, representatives of Party A orally communicated to Mr. Kaplan an offer for KapStone of  $25.00 per KapStone share. The KapStone board determined that it was not in the best interests of KapStone stockholders to pursue a transaction with Party A.
In November of 2016, representatives of Moelis contacted KapStone indicating that another industry participant (referred to as Party B) had an interest in discussing the possibility of a potential business combination with KapStone, and subsequently representatives of Party B, KapStone and Moelis met, although Party B did not provide any indication of interest or proposal to KapStone at such time.
In October of 2017, representatives of Party B contacted representatives of Rothschild and indicated an interest in meeting with KapStone to discuss the possibility of a potential business combination with KapStone. Representatives of Rothschild then contacted representatives of KapStone’s senior management, indicated that Party B had made such an unsolicited outreach to Rothschild, and offered to, on behalf of KapStone, arrange a meeting between representatives of KapStone and representatives of Party B.
On November 9, 2017, Mr. Steve Voorhees, the President and Chief Executive Officer of WestRock, contacted Mr. Kaplan indicating that WestRock was interested in a potential business combination with KapStone, and asked to meet with representatives of KapStone.
On November 10, 2017, representatives of Party B met with representatives of Rothschild and KapStone’s management, including Mr. Kaplan, and discussed developments in the industry generally and indicated an interest in discussing further a potential business combination with KapStone. Mr. Kaplan indicated he would communicate any such offer from Party B to the KapStone board for its consideration.
On November 16, 2017, Mr. Voorhees and Mr. James Porter, the President of Business Development and Latin America of WestRock, met with Messrs. Kaplan and Stone. During this meeting, Messrs. Voorhees and Porter indicated that WestRock was interested in pursuing a potential business combination with KapStone and discussed WestRock’s vision for the combined companies. Mr. Kaplan indicated that he would communicate any such offer from WestRock to the KapStone board for its consideration.
On December 4, 2017, WestRock submitted an initial due diligence request list to KapStone.
During early December of 2017, Mr. Kaplan reported his discussions with Party B and WestRock to Mr. Stone and to Mr. Brian Gamache, the Chairman of the Nominating and Governance Committee of the KapStone board. Each of them agreed with Mr. Kaplan that KapStone should enter into non-disclosure agreements with Party B and WestRock to facilitate the exchange of information.
During late November and early December of 2017, representatives of KapStone and representatives of each of Party B and WestRock negotiated non-disclosure and standstill agreements in order to facilitate the exchange of certain non-public and confidential information. KapStone executed a non-disclosure and standstill agreement with Party B dated as of December 8, 2017, and with WestRock dated as of December 14, 2017, which agreement with WestRock was subsequently amended by an amendment dated as of December 29, 2017 to provide for certain procedures with respect to potentially competitively sensitive information. The agreements each contained “fall-away provisions” such that, if KapStone executed a change of control agreement with a third party, the counterparty to the NDA would be permitted to make private proposals to KapStone.
On December 12, 2017, representatives of Party B toured KapStone’s mill in Charleston, South Carolina. On December 13, 2017, representatives of senior management of Party B and its financial advisor met with Mr. Kaplan, other members of KapStone senior management and representatives of Rothschild,
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during which meeting Party B provided KapStone with an overview of its business, and provided KapStone with a written non-binding indication of interest and orally provided a price range to acquire KapStone for $25.00 to $28.00 in cash per KapStone share. Mr. Kaplan responded that he would inform the KapStone board of Party B’s indication of interest.
On December 14, 2017, representatives of WestRock met with representatives of KapStone management, during which meeting representatives of WestRock confirmed their interest in pursuing a potential business combination with KapStone and provided KapStone with a detailed overview of WestRock’s diligence requests and a general discussion with respect thereto. Mr. Kaplan indicated he would inform the KapStone board of WestRock’s interest.
On December 15, 2017, the KapStone board held a regularly scheduled meeting in person at which members of senior management were in attendance. During an executive session of the KapStone board, participated in by Mr. Kaplan and Ms. Kathryn Ingraham, KapStone’s Vice President, Secretary and General Counsel, Ms. Ingraham provided an overview of the fiduciary duties of the KapStone board under Delaware law, and Mr. Kaplan discussed with the KapStone board the communications by Party B and WestRock, indicating each was interested in engaging in a potential business combination transaction with KapStone, including that Party B had orally provided a price range to acquire KapStone for $25.00 to $28.00 in cash per KapStone share. Discussion ensued regarding Party B’s financial ability to accomplish such a transaction. The KapStone board then engaged in a discussion regarding factors relevant to determining whether to explore a potential sale of KapStone, including external factors such as the current state of the industry (including the view of management that beyond 2019 the industry may encounter challenges, including as a result of the expectation of additional production capacity to be provided from existing and new industry participants) and internal factors, including the condition of KapStone’s plants and mills and capital expenditures necessary to maintain KapStone’s competitive position, factors related to KapStone’s liquidity and capital resources (including higher and likely rising interest rates and current leverage ratio) and factors related to senior management succession planning. Following this discussion, the KapStone board authorized management to share information on a confidential basis with WestRock and Party B, to engage an economist to prepare an antitrust analysis, and to update KapStone’s 2018 budget (which, as finalized as described below, is the 2018 Operating Plan (as defined under “Proposal 1: The Adoption of the Merger Agreement — Certain KapStone Forecasts”, beginning on page 95)) to reflect the KapStone board’s review and discussion of the 2018 budget at that meeting. The KapStone board also authorized management to begin discussions with financial advisors in connection with potentially engaging such advisors regarding pursuing a potential business combination transaction.
On December 22, 2017, the KapStone board held a special meeting at which members of senior management were in attendance. Ms. Ingraham provided an overview of the fiduciary duties of the KapStone board under Delaware law. Mr. Kaplan then led a discussion regarding KapStone’s capital plan for the next five years (referred to as the capital plan), and Mr. Kaplan and other members of senior management answered questions from the KapStone board about the assumptions made and methodologies used in preparing the capital plan. Management then reviewed and discussed KapStone’s revised 2018 Operating Plan including the assumptions made therein. Management indicated that, consistent with prior direction from the KapStone board, the revised 2018 Operating Plan did not reflect any change in containerboard pricing for 2018, and also did not reflect the potential impact of changes to federal tax laws. Next, the KapStone board discussed potentially engaging each of Rothschild and Moelis as financial advisors. Ms. Ingraham reviewed the disclosures of Rothschild and Moelis regarding the absence of any potential conflicts of interest that could arise if KapStone engaged each financial advisor in connection with a potential business combination transaction with certain counterparties (as further described under “Proposal 1: The Adoption of the Merger Agreement — KapStone’s Reasons for the Mergers; Recommendation of the KapStone Board of Directors”, beginning on page 57). The KapStone board concluded that, based upon the information provided by Rothschild and Moelis, neither had any relationships that would be likely to impair their ability to provide independent advice or an independent fairness opinion and authorized management to engage Rothschild and Moelis on the terms presented at the meeting, and that given each of Rothschild’s and Moelis’s respective contacts in the industry and respective insights with respect to KapStone and its evaluation of strategic alternatives, it was in the best interests of KapStone to engage both financial advisors. The KapStone board then approved making available on a confidential basis to Party B and WestRock the capital plan and revised 2018 Operating Plan.
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Later on December 22, 2017, acting at the direction of the KapStone board, KapStone opened an online virtual data room to representatives of WestRock providing limited information, including the capital plan and 2018 Operating Plan, in response to an initial due diligence request list submitted by WestRock, and opened an online virtual data room to Party B containing the capital plan and 2018 Operating Plan.
Over the course of the next several weeks, each of Party B and WestRock, and their respective advisors, engaged in preliminary financial and business due diligence and representatives of KapStone continued to provide additional due diligence information in response to further due diligence requests.
On January 4, 2018, representatives of Party B met with Messrs. Matt Kaplan and Randy Nebel, Executive Vice President of Integrated Packaging at KapStone, during which representatives of Party B reiterated their interest in engaging in a business combination transaction with KapStone. Mr. Kaplan indicated he would communicate any revised offer from Party B to the KapStone board for its consideration.
On January 10, 2018, Party B provided KapStone with a written non-binding indication of interest to acquire KapStone for $30.00 to $33.00 in cash per KapStone share. The indication of interest indicated that Party B would finance the potential transaction with $2.3 billion of debt with recourse solely to KapStone’s assets, cash on hand and additional debt facilities with recourse to Party B’s assets. It also indicated the potential transaction would be subject to certain regulatory approvals and approval by Party B’s shareholders. The indication of interest also stated that Party B believed it would be in a position to sign definitive agreements for a potential transaction within six to eight weeks and believed it would be able to close a potential transaction within four to six months after signing. Party B also provided letters from two financial institutions indicating that each such institution was highly confident that it would be able to provide acquisition financing to Party B to finance a potential business combination between Party B and KapStone. Mr. Kaplan communicated to Party B that he would share the indication of interest with the KapStone board.
On January 12, 2018, Mr. Voorhees and Mr. Robert McIntosh, the Executive Vice President, General Counsel and Corporate Secretary of WestRock, met with Messrs. Stone and Kaplan and Ms. Ingraham. During the meeting, Mr. Voorhees provided KapStone with an overview of its business, and provided KapStone with a written non-binding indication of interest to acquire KapStone for $17.40 in cash and 0.170 WestRock shares per KapStone share, which, based on a closing stock price of WestRock shares of $68.26 on January 11, 2018, represented an implied offer per KapStone share of  $29.00. The indication of interest noted that any potential transaction would be subject to customary closing conditions, but would not include a financing condition, and would not require approval of WestRock’s stockholders. The indication of interest also stated that WestRock expected to sign a definitive agreement by January 29, 2018. Mr. Kaplan communicated to WestRock that he would share the indication of interest with the KapStone board.
On January 15, 2018, KapStone executed engagement letters with Rothschild and Moelis formally engaging them as KapStone’s financial advisors in connection with a potential business combination.
Also on January 15, 2018, Mr. McIntosh delivered a draft merger agreement to KapStone reflecting the terms of the written non-binding indication of interest delivered by Mr. Voorhees on January 12, 2018. The merger agreement, among other terms and conditions:

did not permit KapStone to terminate the merger agreement to enter into a superior proposal;

provided for a termination fee to be payable by KapStone equal to 4.0% of the aggregate equity value of KapStone under certain circumstances, including if the KapStone board changed its recommendation to KapStone stockholders with respect to the transaction; and

provided that WestRock would not be required to take any divestiture action to obtain regulatory approval if all such actions in the aggregate would reasonably be expected to have a material adverse effect on WestRock, KapStone and their respective subsidiaries taken as a whole (measuring such companies as a whole as though they were the size of KapStone and its subsidiaries, taken as a whole).
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On January 16, 2018, the KapStone board held a special meeting at which members of senior management, representatives of Rothschild, representatives of Moelis and representatives of Sidley Austin LLP (referred to as Sidley), KapStone’s outside legal counsel, were in attendance. Representatives of Sidley reviewed with the KapStone board their fiduciary duties under Delaware law in the context of a potential business combination transaction and other legal considerations in connection with a potential business combination transaction. Mr. Kaplan then led a discussion regarding discussions that had taken place between KapStone and each of Party B and WestRock since the December 22nd KapStone board meeting, including a discussion regarding the written non-binding indications of interest provided by each party, copies of which had been provided to the Board. Next, members of management discussed with the KapStone board the KapStone forecasts that management was preparing. The discussion included the methodologies being used by KapStone management and key assumptions. Management also noted that because of the potential for a containerboard price increase, management was preparing two forecast cases — one that included the effects of such a price increase and one that did not. Representatives of Rothschild and Moelis then led a discussion with the KapStone board regarding existing market and industry conditions and the impact those conditions had on the mergers and acquisitions market and KapStone’s strategic alternatives, and provided a summary of the non-binding indications of interest that had been received by KapStone from Party B and WestRock. The KapStone board, management and KapStone’s advisors also discussed regulatory and financing considerations with respect to WestRock and Party B, including the significant amount of debt financing that Party B was proposing to incur relative to its cash flows and net assets. The KapStone board, management and KapStone’s advisors then discussed Party A and other potentially interested parties should the KapStone board determine to continue exploring a potential transaction. During this discussion, members of management and representatives of Rothschild and Moelis gave their perspectives regarding the likely level of interest of other potentially interested parties as well as the ability of such parties to consummate a transaction. Following this discussion, the KapStone board authorized KapStone’s management, Rothschild and Moelis to continue discussions with WestRock and Party B regarding a potential business combination transaction for KapStone. Taking into account the perspectives of management and KapStone’s financial advisors and the KapStone board’s familiarity with the industry and its participants, as well as concerns with respect to confidentiality, the KapStone board also directed management of KapStone to contact Party A to determine whether it was interested in exploring a potential business combination transaction.
On January 17, 2018, Mr. Kaplan contacted representatives of Party A to inquire about Party A’s interest in exploring a potential business combination with KapStone. Representatives of Party A indicated Party A was interested in exploring a potential business combination with KapStone and would like to discuss the matter further, and that Party A would visit KapStone’s headquarters the following day.
Also on January 17, 2018, as directed by the KapStone board, representatives of Rothschild and Moelis contacted representatives of Party B and WestRock and informed each that KapStone was not willing to engage in a transaction based on the terms proposed by each, but that KapStone remained interested in continuing to explore a potential business combination and would be expanding the number of parties with which KapStone was discussing a potential business combination.
KapStone and Party A then executed a non-disclosure and standstill agreement dated as of January 18, 2018 in order to facilitate the exchange of certain non-public and confidential information. Similar to the non-disclosure and standstill agreements with Party B and WestRock, the agreement with Party A included a “fall-away” provision. Later that day, members of management of KapStone and representatives of Rothschild and Moelis met with members of management of Party A. Party A’s management reconfirmed its interest in exploring a potential business combination between the parties and indicated that Party A would be submitting a written non-binding proposal in the near term.
Over the course of the next several days, WestRock and its advisors engaged in continued financial, business and legal due diligence and representatives of KapStone continued to provide additional due diligence information to WestRock and Party B in response to their diligence requests, and Party A continued its due diligence, including conducting a conference call with KapStone management on January 22, 2018.
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On January 22, 2018, Messrs. Voorhees and McIntosh met with Mr. Kaplan and Ms. Ingraham and provided a revised, written non-binding indication of interest to acquire KapStone for $35.00 in cash per KapStone share. The proposal also contemplated offering all KapStone stockholders the option to elect to receive Holdco shares in lieu of cash, based on a fixed exchange ratio to be set at the time of signing of the merger agreement (equal to the proposed $35.00 cash offer per KapStone share divided by the price per WestRock share based on the last trading day prior to the public announcement of the merger agreement), with such stock consideration capped at 25% of the aggregate merger consideration. KapStone stockholders wishing to elect to receive Holdco shares would be required to make such an election by the time of the KapStone special meeting. The written non-binding indication of interest provided that it would automatically expire, and no longer be valid, if the parties did not enter into a definitive agreement by 8:30 a.m. Central Time on January 29, 2018. During the conversation, Mr. Voorhees also indicated that no other offer would be forthcoming and that the offer set forth in the indication of interest was WestRock’s best and final offer.
Later on January 22, 2018, Cravath, Swaine & Moore LLP, WestRock’s outside legal counsel (referred to as Cravath), delivered a draft merger agreement to KapStone reflecting the terms of the updated non-binding indication of interest previously delivered by Mr. Voorhees. The merger agreement, among other terms and conditions, (a) did not permit KapStone to terminate the merger agreement to consummate or enter into an agreement in respect of a superior proposal, (b) provided for a termination fee equal to 4.0% of the equity value of KapStone to be payable by KapStone under certain circumstances, including if the KapStone board changed its recommendation to KapStone stockholders with respect to the transaction and (c) provided that WestRock would not be required to take any divestiture action to obtain regulatory approval if all such actions in the aggregate would reasonably be expected to have a material adverse effect on WestRock, KapStone and their respective subsidiaries (but measuring all such entities in the aggregate as though they were the size of KapStone and its subsidiaries).
On January 23, 2018, Party A submitted a written non-binding proposal to acquire KapStone for $32.25 in cash per KapStone share. The proposal stated that (a) the transaction would be financed via a combination of a rights offering to existing shareholders of Party A and new debt facilities, both of which would be fully underwritten by major international banks, (b) the transaction would be subject to approval by Party A’s shareholders and (c) Party A would be willing to agree to a “hell or high water”standard for any required antitrust approvals. Party A provided letters from two financial institutions each indicating that such financial institution was highly confident that it would be able to provide an underwriting commitment in respect of an equity issuance by Party A to fund a portion of the purchase price to be paid in connection with a potential business combination transaction with KapStone, and one of the institutions also indicated that it was highly confident it would also be able to provide acquisition debt financing in connection with a potential business combination transaction with KapStone. The written non-binding proposal also stated that Party A would need six weeks to conduct due diligence prior to entering into a definitive merger agreement, and was made on the basis that each party commit to a period of exclusivity to enable completion of due diligence and entry into a definitive merger agreement.
On January 23, 2018, a communication was sent by KapStone’s senior management to the members of the KapStone board containing the indication of interest received from WestRock on January 22, 2018 and the indication of interest received from Party A on January 23, 2018 and describing the current state of discussions.
Also on January 23, 2018, Cravath provided KapStone with a draft voting agreement which WestRock contemplated would be signed by Messrs. Stone and Kaplan and certain affiliated entities in connection with the execution of any merger agreement between WestRock and KapStone.
On January 24, 2018, Mr. Kaplan spoke with the Chief Executive Officer of Party A. Mr. Kaplan informed Party A that its proposed price was meaningfully lower than the highest bid that KapStone had received, and that Party A would also need to improve its proposed timing to signing if it wished to remain competitive. The Party A CEO indicated that while Party A may be able to move more quickly, it was unlikely that Party A would be able to increase its price. Also on January 24, 2018, representatives of Rothschild and Moelis engaged in a discussion with a senior representative of Party A. During this conversation Party A’s representative noted that although Party A may be able to increase its price slightly
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and move more quickly, it would not be willing to do so without receiving specific price guidance, and indicated that Party A would not be able to respond regarding any potential increase in price until after receiving an update regarding the results of the next meeting of the KapStone board. Party A also reiterated to representatives of Rothschild and Moelis, however, that Party A had attempted to “put their best foot forward” in their initial non-binding indication of interest. Representatives of Rothschild and Moelis indicated to Party A that KapStone would not provide specific price guidance, but noted that Party A’s bid was meaningfully lower than the highest bid received by KapStone and that Party A would need to move more quickly in light of where things stood with other potentially interested parties.
Later on January 24, 2018, representatives of Sidley engaged in a discussion with representatives of Cravath regarding the draft merger agreement provided by Cravath.
On January 25, 2018, the KapStone board held a special meeting at which members of senior management, representatives of Rothschild, representatives of Moelis and representatives of Sidley were in attendance. Mr. Kaplan briefed the KapStone board regarding the most recent written non-binding proposals received from Party A, Party B and WestRock. Mr. Kaplan and representatives of Rothschild and Moelis summarized for the KapStone board the conversations that they had with the bidders over the last several days, including the discussions regarding anticipated timing to be ready to sign a definitive agreement, that Party A indicated its proposal was made on the basis of the parties agreeing to a period of exclusivity, that WestRock’s proposal indicated it would terminate if the parties had not signed a definitive agreement by the morning of January 29, 2018 and that Party A had indicated that it may be able to improve its timing and may be able to increase its price slightly but would require price guidance and an exclusivity period. Representatives of KapStone, Rothschild, Moelis and the KapStone board also discussed Party B’s ability to finance a potential business combination, that Party B had not improved its offer and the fact that Party B’s ability to consummate a potential business combination would be subject to the approval of certain regulatory authorities and Party B’s shareholders. KapStone’s management discussed with the KapStone board the two sets of projections that management had prepared — one giving effect to a containerboard price increase in 2018 and another not giving effect to such an increase. Members of KapStone’s senior management expressed the view that it was more likely than not, in their opinion, that there would be a containerboard price increase in the industry in 2018. Following discussion, the KapStone board adopted the 2018 – 2024 forecasts and directed each of Rothschild and Moelis to use the 2018 – 2024 financial forecasts in their respective financial analyses going forward. During the KapStone board meeting, it was noted that the 2018 Operating Plan provided to prospective bidders during due diligence did not reflect the anticipated containerboard price increase. It was noted by KapStone senior management that WestRock had specifically requested a financial model that did not include a price increase, and that given the other bidders’ knowledge of the industry, the other bidders would have reflected their views regarding any potential containerboard price increase in their respective financial models and non-binding indications of interest. Representatives of Rothschild and Moelis then each led the KapStone board through a discussion of their respective preliminary financial analyses of KapStone, which, as had previously been directed by KapStone management, were based on the forecasts prior to giving effect to the 2018 containerboard price increase; however, throughout their presentations, representatives of Rothschild and Moelis provided commentary regarding the effects of a potential containerboard price increase on their respective financial analyses. In response to questions from members of the KapStone board, representatives of Moelis discussed the low likelihood that there were any other potential parties who had not been contacted and who would be willing to pay more for KapStone than the $35.00 in cash per KapStone share being offered by WestRock, or that WestRock would offer more consideration. Representatives of Sidley then reviewed with the KapStone board the material terms of the draft merger agreement and voting agreements provided by WestRock’s legal counsel (including the fact that the draft merger agreement (a) did not permit KapStone to terminate the merger agreement to consummate or enter into an agreement in respect of a superior proposal, (b) provided for a termination fee equal to 4.0% of the equity value of KapStone to be payable by KapStone under certain circumstances, including if the KapStone board changed its recommendation to KapStone stockholders with respect to the transaction and (c) provided that WestRock would not be required to take any divestiture action to obtain regulatory approval if all such actions in the aggregate would reasonably be expected to have a material adverse effect on WestRock, KapStone and their respective subsidiaries (but measuring all such entities in the aggregate as though they were the size of KapStone and its subsidiaries)), and the current status of the antitrust
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regulatory analysis. The KapStone board, management and KapStone’s advisors discussed potential positions regarding the key terms of the merger agreement and the voting agreements. The KapStone board then authorized management and other representatives of KapStone, to engage in negotiations with representatives of WestRock regarding the merger agreement provided by WestRock consistent with the positions discussed by the KapStone board, management and KapStone’s advisors, including with respect to the efforts required to be used by each party to obtain clearance from regulatory authorities to consummate the mergers and with respect to the ability of the KapStone board to consider and negotiate alternative acquisition proposals after execution of a merger agreement with WestRock. The KapStone board also directed management to contact Party A to attempt to elicit an improved offer from them. The KapStone board also determined that in light of the regulatory and financing risks associated with Party B, management did not need to solicit an improved offer from Party B.
Later that evening, at the direction of the KapStone board, representatives of Rothschild and Moelis communicated to Party A that the KapStone board was continuing to evaluate the proposals it had received and that it was not able to provide valuation guidance or exclusivity and that Party A would need to increase its price and commit to working to execute a definitive agreement with respect to a potential business combination with KapStone more quickly than Party A had previously indicated, in order to be competitive with another proposal received by KapStone.
On January 26, 2018, another industry participant announced a $50.00 per ton containerboard price increase, and later that day KapStone also announced a $50.00 per ton containerboard price increase.
Also on January 26, 2018, representatives of Party A indicated to Messrs. Kaplan and Stone that Party A was not willing to submit a revised proposal in light of the timeframe in which KapStone was proceeding and the fact that another bidder existed at a higher price and was further along in its work, unless Party A was provided “deal protection” (which was confirmed to be a request for KapStone to engage in exclusive negotiations with Party A). In a subsequent discussion, representatives of Rothschild and Moelis inquired of representatives of Party A as to whether Party A needed any additional information to finalize its views on valuation, to which representatives of Party A indicated there was not any such information that they still needed. Party A also indicated that the containerboard price increase announced earlier that day had been factored into its bid. Representatives of Rothschild and Moelis reiterated that KapStone would not provide specific valuation guidance to Party A or be able to offer exclusivity. The representatives of Party A indicated that Party A would not be able to increase its offer price or move much more quickly than previously indicated.
Later on January 26, 2018, Mr. Kaplan and Ms. Ingraham met with Messrs. Voorhees and McIntosh. During the course of the meeting the parties negotiated resolution of various deal terms, including:

the right of KapStone to terminate the merger agreement to accept a superior proposal under certain circumstances;

a reduction in the termination fee payable by KapStone in the event that KapStone were to terminate the merger agreement to enter into a superior proposal from 4.0% to 3.0% of the aggregate equity value of KapStone; and

a commitment by WestRock to take certain actions in connection with obtaining regulatory approvals.
Over the course of the next two days, representatives of Sidley and Cravath negotiated the remaining terms of the merger agreement (including with respect to the scope of the representations and warranties to be made by KapStone and the scope of KapStone’s non-solicitation obligations with respect to acquisition proposals) and exchanged drafts of the merger agreement and related disclosure letters. During this time, WestRock and its advisors engaged in continued confirmatory financial, business and legal due diligence and representatives of KapStone continued to provide additional due diligence information to WestRock. Representatives of Cravath and Sidley also negotiated the terms of the voting agreements to be signed by each of Messrs. Kaplan and Stone and certain affiliated entities.
On January 28, 2018, the KapStone board held a special meeting in person at which members of KapStone’s senior management, representatives of Rothschild, representatives of Moelis, and representatives of Sidley were in attendance. Mr. Kaplan and representatives of Rothschild and Moelis
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updated the KapStone board with respect to communications between KapStone and KapStone’s financial advisors and each of WestRock, Party A and Party B. As part of the update, representatives of KapStone’s financial advisors noted that Party A confirmed during their conversations that it was aware that the 2018 Operating Plan did not include a 2018 containerboard price increase and Party A had included its expectations regarding containerboard price increases into the price it had proposed. They also noted the discussions with Party A, Party A’s conditions to submitting a revised proposal and that Party A had indicated it was unwilling to submit a revised proposal because its conditions had not been met. Next, representatives of Sidley briefed the KapStone board regarding the material terms of the draft merger agreement and the voting agreements that had been negotiated with WestRock, and the current status of the work undertaken to assess the potential risk of not receiving the requisite approvals for the transaction from the antitrust regulatory authorities. Representatives of Sidley further provided a detailed discussion regarding the structure, the regulatory closing conditions and efforts each party was required to undertake to obtain regulatory approvals, the intended tax treatment of the transaction, conditions precedent and deal protection terms, highlighting key issues regarding certainty of closing and deal protection. The KapStone board also discussed with Sidley the factors that the KapStone board had considered in connection with the evaluation of the potential transaction and the fiduciary obligations of the KapStone board in connection therewith. Representatives of Rothschild and Moelis then each led a discussion with the KapStone board regarding the respective financial analyses of KapStone prepared by each financial advisor. Throughout their respective presentations, representatives of Rothschild and Moelis provided commentary regarding the effects of the recent containerboard price increase and changes to federal tax laws and related considerations relative to their respective financial analyses based on the 2018 – 2024 financial forecasts. During the presentation, members of the KapStone board asked questions which representatives of the financial advisors answered. In response to questions, representatives of the financial advisors and members of senior management indicated they did not believe that WestRock or any other potential parties would be willing to pay a price higher than the $35.00 in cash per KapStone share being offered by WestRock. Following this discussion, (i) a representative of Rothschild stated Rothschild’s opinion that, as of January 28, 2018 and based on and subject to the assumptions, procedures, factors, qualifications and limitations set forth in Rothschild’s written opinion, dated the same date, the KapStone cash consideration payable to KapStone stockholders in the mergers pursuant to the terms of the merger agreement was fair, from a financial point of view, to such stockholders, and (ii) a representative of Moelis stated Moelis’s opinion that, as of January 28, 2018, and based on and subject to the limitations, conditions, qualifications and assumptions set forth in its written opinion delivered following the meeting, the cash consideration to be received by KapStone’s stockholders pursuant to the merger agreement is fair from a financial point of view to such holders.
Following meetings of the audit and compensation committees of the KapStone board, Mr. Kaplan then stated that KapStone’s management recommended that the KapStone board approve the potential transaction with WestRock, and following discussion, and upon motion duly made and seconded, the KapStone board unanimously approved the resolutions, among other things, adopting and approving the mergers and the merger agreement and recommending the mergers to KapStone stockholders for the KapStone stockholders’ consideration and approval.
Late in the evening of January 28, 2018, KapStone, WestRock, Holdco, WestRock merger sub and KapStone merger sub executed the merger agreement, and WestRock, Messrs. Kaplan and Stone, the Roger W. Stone Revocable Trust and the Roger and Susan Stone Family Foundation executed their respective voting agreements.
Following the execution of the merger agreement, on January 29, 2018, KapStone and WestRock issued a joint press release announcing the entry into the merger agreement.
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KapStone’s Reasons for the Mergers; Recommendation of the KapStone Board of Directors
Board Recommendation; Reasons for the Merger
In evaluating the merger agreement and the transactions contemplated thereby, including the KapStone merger, and making the KapStone recommendation, the KapStone board consulted with KapStone’s senior management team and outside legal and financial advisors and considered and evaluated numerous factors over the course of five meetings of the KapStone board beginning December 15, 2017, including the following material factors, each of which the KapStone board believes supported its unanimous determinations:

Merger Consideration.   That the KapStone cash consideration represented:

a 31.9% premium over the closing trading price of KapStone shares on January 26, 2018, the last trading day prior to the public announcement of the merger agreement;

a 53.7% premium over the volume-weighted average closing price of KapStone shares reported for the 30 trading day period ending on January 26, 2018; and

a 59.9% premium over the volume-weighted average closing price of KapStone shares reported for the 60 trading day period ending on January 26, 2018.

Historical Performance, Prospects and Strategic Alternatives.

The KapStone board considered the current and historical financial condition, results of operations and business of KapStone, KapStone’s competitive position in the industry and KapStone’s historical performance relative to other companies in the industry, as well as recent changes in the industry, including changes to federal tax laws, and KapStone’s then recently announced $50 per ton containerboard price increase (including the expectation of additional production capacity to be provided from existing and new industry participants).

The KapStone board considered the KapStone forecasts (as defined in the section entitled “— Certain KapStone Forecasts”) prepared by senior management of KapStone and the risks associated with the ability of KapStone to meet such projections if it were to continue to operate as an independent company, including the condition of KapStone’s plants and mills and the level of capital expenditure investments necessary to remain competitive in the industry, as well as the uncertainty that may be created by potential executive officer succession actions that may be necessary in the near to mid-term. The KapStone board also considered KapStone’s actual results in the past relative to results projected by KapStone’s management.

In light of the foregoing, the KapStone board considered KapStone’s near-term and longer-term prospects as an independent company.

The KapStone board considered the potential strategic alternatives available to KapStone, including pursuing a standalone strategy and divesting one of its divisions, and the potential stockholder value that might result from such alternatives.

The KapStone board considered the feasibility of a divestiture of one of its divisions on attractive terms in light of the fact that KapStone held discussions with parties interested in buying such division in the summer of 2017, which did not result in a transaction.

The KapStone board’s view, taking into account, among other things, its review and discussions with KapStone’s senior management and advisors regarding potential strategic alternatives for KapStone, was that other strategic alternatives reviewed by the KapStone board were unlikely to create greater overall value for KapStone stockholders than the mergers.
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Other Potentially Interested Parties.

The KapStone board considered the fact that KapStone received proposals from two other potentially interested parties, including from Party A, the party the KapStone board believed to be most likely to offer a proposal competitive with WestRock’s offer. The KapStone board considered the execution risk with respect to Party B’s proposal and the fact that neither Party A nor Party’s B’s proposal offered a higher price than WestRock’s, as well as the KapStone board’s belief that neither Party A nor Party B would be willing or able to improve its proposal to be more compelling to KapStone stockholders than the merger agreement.

The KapStone board also considered its belief, taking into account, among other things, its familiarity with the industry and discussions with KapStone’s senior management and financial advisors, that other potentially interested parties were unlikely to be willing to acquire KapStone at a purchase price in excess of the KapStone cash consideration of  $35.00 per KapStone share offered by WestRock and that such other potentially interested parties would be able to submit a competing proposal, if they so desired, following the announcement of the execution of the merger agreement.

Course of Negotiations.   The KapStone board considered the course of negotiations with WestRock, including the $6.00 per KapStone share increase offered by WestRock from its initial offer and WestRock’s statements that WestRock’s offer would terminate if the parties had not executed a definitive agreement by the morning of January 29, 2018 and that the KapStone cash consideration of  $35.00 per KapStone share was the highest price WestRock was willing to pay. In light of the foregoing and discussions with senior management and KapStone’s financial advisors, the KapStone board believed that the KapStone cash consideration of  $35.00 per KapStone share was the highest price that WestRock was willing to pay for KapStone.

Cash Consideration; Certainty of Value.   The KapStone board considered the fact that the KapStone cash consideration is a fixed cash amount, providing KapStone stockholders with certainty of value and liquidity immediately upon the closing of the mergers, in comparison to the risks and uncertainty that would be inherent in remaining a stand-alone company or pursuing a transaction in which KapStone stockholders were required to receive consideration that consisted of stock.

Stock Election.

The KapStone board considered the fact that, although the merger agreement permits KapStone stockholders to elect to receive a portion of the KapStone merger consideration in the form of Holdco shares, the exchange ratio governing the number of such Holdco shares that will be received per KapStone share is fixed and will not be adjusted in the event of any change in the trading price of either KapStone shares or WestRock shares and such stock elections are subject to proration procedures that are designed to ensure that the KapStone merger consideration in the form of Holdco shares is received in respect of no more than 25% of the issued and outstanding KapStone shares immediately prior to the effective time, and that a U.S. holder of KapStone shares electing to receive all or a portion of the KapStone merger consideration in the form of Holdco shares should not recognize any gain or loss for U.S. federal income tax purposes upon the exchange of KapStone shares for Holdco shares in the KapStone merger.

The KapStone board considered that this stock election permits KapStone stockholders the ability to elect to continue to participate in the potential growth prospects of the combined company and benefit from any synergies resulting from the consummation of the transactions contemplated by the merger agreement.

No Financing Condition; Ability to Finance.   The KapStone board considered that the mergers are not subject to a financing condition and, in particular, that WestRock represented that, at the closing, it will have sufficient cash to pay the KapStone cash consideration and the other amounts payable in connection with the consummation of the transactions contemplated by the merger agreement and the related fees and expenses of WestRock, Holdco, WestRock merger sub and KapStone merger sub.
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Opinion of Rothschild.   The KapStone board considered the financial analyses presented by Rothschild and Rothschild’s opinion to the effect that, as of January 28, 2018 and based on and subject to the assumptions, procedures, factors, qualifications and limitations set forth in Rothschild’s written opinion, dated the same date, the KapStone cash consideration payable to KapStone stockholders in the mergers pursuant to the terms of the merger agreement was fair, from a financial point of view, to such KapStone stockholders (see the section entitled “— Opinions of KapStone’s Financial Advisors — Rothschild Inc.”, beginning on page 63). In considering such opinion, the KapStone board took into account responses to inquiries it made to Rothschild regarding past fees received by Rothschild for services provided to KapStone and that Rothschild had not received any fees for services to KapStone or WestRock during the prior two years, and fees payable to Rothschild in connection with the transactions contemplated by the merger agreement.

Opinion of Moelis.   The KapStone board considered the financial analyses presented by Moelis and Moelis’ opinion to the effect that, as of January 28, 2018 and based on and subject to the assumptions, procedures, factors, qualifications and limitations set forth in Moelis’ written opinion, the KapStone cash consideration of  $35.00 per KapStone share to be received by KapStone stockholders pursuant to the merger agreement is fair, from a financial point of view to such KapStone stockholders (see the section entitled “— Opinions of KapStone’s Financial Advisors — Moelis & Company LLC”, beginning on page 69). In considering such opinion, the KapStone board took into account responses to inquiries it made to Moelis regarding past fees received by Moelis for services provided to KapStone and that Moelis had not received any fees for services to KapStone or WestRock during the prior two years, and fees payable to Moelis in connection with the transactions contemplated by the merger agreement.

The Merger Agreement.   The KapStone board considered the general terms and conditions of the merger agreement and the course of negotiations of the key provisions thereof, including:

the representations, warranties and covenants made by each party, including KapStone’s ability to continue to pay regular quarterly cash dividends in accordance with the terms of the merger agreement;

KapStone’s ability, under certain circumstances, to furnish information to and conduct negotiations with a third party, if the KapStone board determines in good faith, after consultation with KapStone’s financial advisors and outside legal counsel, that such third party has made an acquisition proposal that constitutes or would reasonably be expected to lead to a superior proposal;

the fact that, in certain circumstances, the KapStone board is permitted to change the KapStone recommendation and to terminate the merger agreement to enter into an agreement with respect to a superior proposal, subject to the payment to WestRock of a termination fee of  $105,600,265, or approximately 3% of the equity value of the transaction;

the fact that, in certain other circumstances not related to a superior proposal, the KapStone board is permitted to change the KapStone recommendation, which would result in WestRock having the right to terminate the merger agreement at which time KapStone would be required to pay WestRock a termination fee of  $105,600,265; and

the KapStone board’s belief that the terms of the merger agreement were reasonable and would not discourage other potential acquirers from making an alternative proposal to acquire KapStone.

Structure; Company Stockholder Adoption.   The KapStone board considered that the structure of the transaction as a one-step statutory merger of KapStone will result in detailed public disclosure and a substantial period of time prior to the meeting of KapStone stockholders to consider adoption of the merger agreement during which an unsolicited superior proposal could be brought forth, particularly given the belief of the KapStone board that other potential acquirers of KapStone are familiar with KapStone and its industry. The KapStone board also considered that completion of the KapStone merger requires the affirmative vote of the holders of at least a majority of the outstanding KapStone shares.
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Availability of Appraisal Rights.   The KapStone board considered the availability of appraisal rights under Delaware law to KapStone stockholders who do not vote in favor of the adoption of the merger agreement and who otherwise comply exactly with all of the procedures set forth in Section 262 of the DGCL, which provides such eligible stockholders with an opportunity to have the Court of Chancery determine the fair value of their KapStone shares, which may be more than, less than or the same as the amount such stockholders would have received under the merger agreement.

Consummation of the Merger.   The KapStone board considered the conditions to the consummation of the mergers and the likelihood of closing and noted the fact that no non-governmental third party consents are conditions to the consummation of the mergers and the belief that the prospects for receiving all required regulatory approvals are favorable. The KapStone board considered its belief that the merger agreement, taken as a whole, provides a high degree of protection against the risk that consummation of the mergers is delayed or that the mergers cannot be completed in connection with regulatory approvals, based on, among other things, the following:

the fact that each party is required to cooperate and use reasonable best efforts to take all actions necessary to cause as promptly as reasonably practicable the receipt of all antitrust regulatory approvals;

the fact that in addition to the above each party is required to take all actions necessary to resolve objections to the consummation of the mergers under any antitrust laws, provided that WestRock is not required to undertake any divestiture actions if such divestiture actions, in combination with all other divestiture actions, would require (i) the divestiture of any mill that had annual production capacity as of September 30, 2017 of more than 600,000 tons of product or (ii) any divestiture actions (without giving effect to a divestiture action contemplated by clause (i)) that would reasonably be expected to have a material adverse effect on KapStone, WestRock and their respective subsidiaries, taken as a whole (measuring such companies as a whole as though they were the size of KapStone and its subsidiaries, taken as a whole); and

the merger agreement may be terminated by KapStone or WestRock if the mergers have not been consummated by October 29, 2018, subject to extension under certain circumstances to April 29, 2019 if necessary to obtain the required antitrust approvals.

Specific Performance Right.   The KapStone board considered the fact that, if any of the other parties to the merger agreement breaches its obligations under the merger agreement, KapStone is entitled to specific performance to prevent breaches of the merger agreement, in addition to any other remedies to which KapStone may be entitled.
In the course of its deliberations, the KapStone board also considered certain risks and other potentially negative factors concerning the transactions contemplated by the merger agreement, including:

the fact that, while KapStone received proposals from two other potentially interested parties (including the proposal solicited by KapStone from Party A) KapStone did not engage in a broader competitive bid process or other broad solicitation of interest; the KapStone board noted that its decision not to engage in a broader competitive bid process was informed by (a) the strength of WestRock’s offer of KapStone cash consideration of  $35.00 per KapStone share, (b) its belief, based on its familiarity with the industry and consultation with KapStone’s management and KapStone’s financial advisors, that other potentially interested parties (including financial buyers) would not likely be prepared to pay more than the KapStone cash consideration, (c) concerns regarding confidentiality breaches that could result from engaging in a broader competitive bid process and potential for negative implications to KapStone’s business operations, (d) the fact that any potentially interested parties would be able to submit a competing proposal, if they so desired, following the announcement of the execution of the merger agreement and (e) its belief that the terms of the merger agreement were reasonable and would not discourage other potential acquirers from making an alternative proposal to acquire KapStone;
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the fact that the merger agreement precludes KapStone from actively soliciting alternative proposals;

the fact that, following the mergers, KapStone will no longer exist as an independent public company and existing KapStone stockholders who do not receive KapStone stock consideration will not participate in the future earnings or growth of KapStone or WestRock or benefit from any synergies that may result from the consummation of the transactions contemplated by the merger agreement;

the fact that the mergers might not be consummated in a timely manner or at all, due to a failure of certain conditions, including the expiration or termination of the waiting period (or any extensions thereof) under the HSR Act and the receipt of antitrust approval from certain jurisdictions other than the U.S.;

the restrictions in the merger agreement on the conduct of KapStone’s business prior to the consummation of the mergers, which may delay or prevent KapStone from undertaking certain business opportunities that may arise;

the fact that, for U.S. federal income tax purposes, the KapStone cash consideration will be taxable to KapStone stockholders who are entitled to receive such consideration (including KapStone stockholders who may have elected to receive the KapStone stock consideration but, due to proration, may receive KapStone cash consideration in respect of a portion of their KapStone shares);

the significant costs involved in connection with entering into and completing the mergers and the substantial time and effort of management required to complete the transactions contemplated by the merger agreement, which may disrupt KapStone’s business operations;

the risks and contingencies related to the announcement and pendency of the transactions contemplated by the merger agreement, including the impact on KapStone’s employees (and the impairment of KapStone’s ability to attract, retain and motivate its employees, including key personnel) and its relationships with existing and prospective customers, distributors, suppliers and other third parties; and

the fact that KapStone’s directors and executive officers may receive certain benefits that are different from, and in addition to, those of KapStone stockholders (such as change in control or termination payments).
The foregoing discussion of the information and factors considered by the KapStone board is not intended to be exhaustive, but includes the material factors considered by the KapStone board. In view of the wide variety of factors considered in connection with its evaluation of the mergers and the complexity of these matters, the KapStone board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and the KapStone recommendation. In addition, individual directors may have given different weights to different factors. The KapStone board did not undertake to make any specific determination as to whether, or to what extent, any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The KapStone board based the KapStone recommendation on its consideration of the totality of the information presented to it, including the factors described above.
In considering the KapStone recommendation, KapStone stockholders should be aware that the executive officers and directors of KapStone have certain interests, including financial interests, in the mergers that may be different from, or in addition to, the interests of KapStone stockholders generally. The KapStone board was aware of these interests and considered them, among other matters, in approving the merger agreement and the transactions contemplated thereby, and in making the KapStone recommendation. For additional information, see the section entitled “Proposal 1: Adoption of the Merger Agreement — Financial Interests of KapStone Directors and Officers in the Mergers”, beginning on page 76.
WestRock’s Reasons for the Mergers
At its meeting on January 28, 2018, the WestRock board unanimously approved and declared advisable the form, terms and provisions of the merger agreement and the WestRock merger and the KapStone merger.
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In evaluating the merger agreement, the WestRock board consulted with and received the advice of WestRock’s management and its legal and financial advisors. In reaching its decision, the WestRock board considered a number of factors, including, but not limited to, the following factors which the WestRock board viewed as generally supporting its decision to approve and enter into the merger agreement.
Strategic Considerations.   The WestRock board considered that the mergers will likely provide a number of significant strategic opportunities, including the following:

WestRock expects to generate cost synergies and performance improvements through the integration of KapStone’s operations into WestRock’s corrugated packaging system;

the mergers will enable WestRock to strengthen its presence on the West Coast of the United States through KapStone’s West Coast facilities and reduce costs across its supply chain;

the mergers will enable WestRock to broaden its differentiated paper and packaging solutions portfolio to existing customers through KapStone’s specialty kraft paper offerings;

the mergers will increase WestRock’s overall mix of virgin fiber;

WestRock expects that the mergers will be accretive to WestRock’s adjusted earnings and cash flow; and

the mergers are consistent with WestRock’s strategic goals.
Other Factors Considered by the WestRock Board.   In addition to considering the strategic factors described above, the WestRock board considered its knowledge of WestRock’s business, operations, financial condition, earnings and prospects and of KapStone’s business, operations, financial condition, earnings and prospects, taking into account the results of WestRock’s due diligence review of KapStone, and the current and prospective business climate in the industry in which WestRock and KapStone operate.
The WestRock board weighed these advantages and opportunities against a number of other factors identified in its deliberations weighing negatively against the mergers, including:

the challenges inherent in completing the mergers, integrating the businesses, operations and workforces of KapStone with those of WestRock, and developing and executing a successful strategy and business plan for the combined company;

the risk that regulatory agencies may object to and challenge the mergers or may impose terms and conditions in order to resolve those objections that adversely affect the financial results of the combined company; see the section entitled “— Regulatory Clearances Required for the Mergers”, beginning on page 86;

the risk that KapStone stockholders may object to and challenge the mergers and take actions that may prevent or delay the consummation of the mergers, including voting against the KapStone merger proposal;

the risk that, despite the efforts of WestRock and KapStone prior to the consummation of the mergers, the combined company may lose key personnel;

the risk of not capturing the anticipated cost synergies and performance improvements, and the risk that other anticipated benefits might not be realized;

the possibility that the combined company might not achieve its projected financial results;

the potential that the fixed exchange ratio under the merger agreement could result in Holdco delivering greater value to the KapStone stockholders than had been anticipated by WestRock should the value of the WestRock shares increase from the date of the execution of the merger agreement; and

the risks of the type and nature described under “Risk Factors”, beginning on page 32, and the matters described under “Cautionary Statement Regarding Forward-Looking Statements”, beginning on page 40.
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The foregoing discussion of the factors considered by the WestRock board is not intended to be exhaustive, but rather includes the principal factors considered by the WestRock board. In view of the wide variety of factors considered in connection with its evaluation of the mergers and the complexity of these matters, the WestRock board did not find it useful and did not attempt to quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination to approve the merger agreement. In addition, individual members of the WestRock board may have given differing weights to different factors. The WestRock board conducted an overall review of the factors described above, including thorough discussions with WestRock’s management and outside legal and financial advisors.
The explanation of the reasoning of the WestRock board and certain information presented in this section are forward-looking in nature and, therefore, the information should be read in light of the factors discussed in the section entitled “Cautionary Statement Regarding Forward-Looking Statements”, beginning on page 40 of this proxy statement/prospectus.
Opinions of KapStone’s Financial Advisors
Rothschild Inc.
KapStone retained Rothschild to act as its financial advisor in connection with the mergers. In connection with Rothschild’s engagement, the KapStone board requested that Rothschild evaluate the fairness, from a financial point of view, to KapStone stockholders of the KapStone cash consideration payable to KapStone stockholders in the mergers pursuant to the terms of the merger agreement. On January 28, 2018, at a meeting of the KapStone board held to evaluate the mergers, Rothschild rendered to the KapStone board an oral opinion, confirmed by delivery of a written opinion, dated January 28, 2018, to the effect that, as of that date and based on and subject to the assumptions, procedures, factors, qualifications and limitations set forth in Rothschild’s written opinion, the KapStone cash consideration payable to KapStone stockholders in the mergers pursuant to the terms of the merger agreement was fair, from a financial point of view, to such KapStone stockholders.
The full text of Rothschild’s written opinion, dated January 28, 2018, to the KapStone board, which sets forth, among other things, the assumptions, procedures, factors, qualifications and limitations on the review undertaken by Rothschild in connection with such opinion, is attached to this proxy statement/​prospectus as Annex B. The description of Rothschild’s opinion set forth in this proxy statement/prospectus is qualified in its entirety by reference to the full text of Rothschild’s opinion. Rothschild’s opinion was provided for the benefit of the KapStone board (solely in its capacity as such) in connection with and for the purpose of its evaluation of the mergers and was limited to the fairness, from a financial point of view, to KapStone stockholders of the KapStone cash consideration payable to KapStone stockholders in the mergers pursuant to the terms of the merger agreement. Rothschild’s opinion did not address the underlying decision that KapStone made to engage in the mergers or any alternative transaction, including the relative merits of the mergers as compared to any alternative transaction, including any alternative transaction that the KapStone board has considered and elected not to pursue. Rothschild’s opinion does not constitute a recommendation to the KapStone board as to whether to approve the mergers or a recommendation as to whether or not any KapStone stockholder should vote, make any election or otherwise act with respect to the mergers or any other matter.
In arriving at its opinion, Rothschild, among other things:

reviewed a draft of the merger agreement, dated January 27, 2018;

reviewed certain publicly available business and financial information that Rothschild deemed to be generally relevant concerning KapStone and the industry in which it operates, including certain publicly available research analyst reports and the reported price and historical trading activity for KapStone shares;

compared the proposed financial terms of the mergers with the publicly available financial terms of certain transactions involving companies Rothschild deemed generally relevant and the consideration received in such transactions;
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compared the financial and operating performance of KapStone with publicly available information concerning certain other public companies Rothschild deemed generally relevant, including implied trading multiples;

reviewed certain internal financial and operating information with respect to the business, operations and prospects of KapStone, including the KapStone forecasts;

reviewed the historical trading prices and trading activity for KapStone shares;

reviewed the premia paid in certain publicly available transactions, which Rothschild believed to be generally relevant; and

performed such other financial studies and analyses and considered such other information as Rothschild deemed appropriate for the purposes of its opinion.
In addition, Rothschild held discussions with certain members of management of KapStone regarding the mergers, the past and current business operations and financial condition and prospects of KapStone, the KapStone forecasts and certain other matters Rothschild believed necessary or appropriate to its inquiry.
In arriving at Rothschild’s opinion, Rothschild, with the KapStone board’s consent, relied upon and assumed, without independent verification, the accuracy and completeness of all information that was publicly available or was furnished or made available to Rothschild by KapStone and its associates, affiliates and advisors, or otherwise reviewed by or for Rothschild, and Rothschild did not assume any responsibility or liability therefor. Rothschild did not conduct any valuation or appraisal of any assets or liabilities of KapStone (including, without limitation, real property owned by KapStone or to which KapStone holds a leasehold interest), nor were any such valuations or appraisals provided to Rothschild, and Rothschild did not express any opinion as to the value of such assets or liabilities. Rothschild did not evaluate the solvency or fair value of KapStone, WestRock or Holdco under any state, federal or other laws relating to bankruptcy, insolvency or similar matters. In addition, Rothschild did not assume any obligation to conduct any physical inspection of the properties or the facilities of KapStone. At the direction of management of KapStone, Rothschild used and relied upon the KapStone forecasts for purposes of its opinion. In relying on the KapStone forecasts, Rothschild assumed, at the direction of KapStone, that the KapStone forecasts were reasonably prepared based on assumptions reflecting the best currently available estimates and judgments by KapStone’s management as to the expected future results of operations and financial condition of KapStone and that the financial results reflected in such KapStone forecasts would be achieved at the times and in the amounts projected. Rothschild did not express a view as to the reasonableness of the KapStone forecasts and the assumptions on which they are based. Certain data underlying Rothschild’s analysis and opinion pre-dated (and/or did not reflect the impact of) the then-recently enacted federal tax legislation (referred to as the tax changes) and the then-recently announced price increases for certain of KapStone’s products (referred to as the price increases).
For purposes of rendering its opinion, Rothschild assumed that the transactions contemplated by the merger agreement would be consummated as contemplated in the merger agreement without any waiver or amendment of any material terms or conditions, including, among other things, that the parties would comply with all material terms of the merger agreement and that in connection with the receipt of all necessary governmental, regulatory or other approvals and consents required for the mergers, no material delays, limitations, conditions or restrictions would be imposed. Rothschild also assumed that no material change in the assets, financial condition, results of operations, business or prospects of KapStone had occurred since the date of the most recent financial statements and other information, financial or otherwise, relating to KapStone made available to Rothschild, and that there was no information or any facts that would make any of the information reviewed by Rothschild incomplete or misleading. Rothschild did not express any opinion as to any tax or other consequences that may result from the mergers, nor does Rothschild’s opinion address any legal, tax, regulatory or accounting matters. Rothschild relied as to all legal, tax and regulatory matters relevant to rendering Rothschild’s opinion upon the assessments made by KapStone and its other advisors with respect to such issues. In arriving at Rothschild’s opinion, Rothschild did not take into account any litigation, regulatory or other proceeding that is pending or may be brought
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against KapStone or any of its affiliates. In addition, Rothschild relied upon and assumed, without independent verification, that the final form of the merger agreement would not differ in any material respect from the draft of the merger agreement reviewed by Rothschild.
Rothschild’s opinion was necessarily based on securities markets, economic, monetary, financial and other general business and financial conditions as they existed and could be evaluated on, and the information made available to Rothschild as of, the date of its opinion and the conditions and prospects, financial and otherwise, of KapStone as they were reflected in the information provided to Rothschild and as they were represented to Rothschild in discussions with management of KapStone. Rothschild did not express any opinion as to the price at which KapStone shares or Holdco shares will trade at any future time, the value of Holdco shares (including the value of Holdco shares issued as KapStone stock consideration pursuant to the merger agreement), or whether any market would develop for Holdco shares. Rothschild’s opinion is limited to the fairness, from a financial point of view, to KapStone stockholders of the KapStone cash consideration payable to such stockholders in the mergers pursuant to the merger agreement and Rothschild did not express any opinion as to any underlying decisions which KapStone made or may have made to engage in the mergers and not in any alternative transaction. Rothschild was not asked to, nor did Rothschild, offer any opinion as to the terms, other than the KapStone cash consideration to the extent expressly set forth in the opinion, of the mergers, the merger agreement or any other agreement entered into in connection with the mergers (including, without limitation, the fairness or value of the KapStone stock consideration or the relative fairness of the KapStone cash consideration and the KapStone stock consideration).
Rothschild’s opinion was given and speaks only as of its date. Subsequent developments may affect Rothschild’s opinion and the assumptions used in preparing it, and Rothschild does not have any obligation to update, revise, or reaffirm its opinion. Rothschild’s opinion was approved by the Global Financial Advisory Commitment Committee of Rothschild.
Rothschild’s opinion was provided for the benefit of the KapStone board (solely in its capacity as such) in connection with and for the purpose of its evaluation of the mergers. Rothschild’s opinion should not be construed as creating any fiduciary duty on Rothschild’s part to any party. In addition, the KapStone board did not ask Rothschild to address, and its opinion does not address, (i) the fairness to, or any other consideration of, the holders of any class of securities (other than KapStone stockholders and then only to the extent expressly set forth in the opinion) or creditors or other constituencies of KapStone or (ii) the fairness of the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of WestRock, KapStone, or any class of such persons, whether relative to the KapStone cash consideration pursuant to the merger agreement or otherwise.
The following represents a summary of the material financial analyses performed by Rothschild in connection with its opinion, dated January 28, 2018, provided to the KapStone board. The summary of these analyses is not a comprehensive description of all analyses and factors considered by Rothschild. The preparation of a fairness opinion is a complex analytical process that involves various determinations as to the most appropriate and relevant methods of financial analysis and the application of these methods to the particular circumstances and, therefore, a fairness opinion is not readily susceptible to summary description. Some of the summaries of financial analyses performed by Rothschild include information presented in tabular format. In order to fully understand the financial analyses performed by Rothschild, the tables must be read together with the full text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data set forth in the tables without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses performed by Rothschild.
Selected Public Companies Analysis
Rothschild reviewed financial and stock market information of KapStone and the following eight selected publicly traded companies (referred to as the selected companies), which Rothschild in its professional judgment considered generally relevant for comparative purposes as publicly traded companies in the containerboard and paper packaging industry, with revenues and enterprise values greater than
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$1 billion and significant geographic reach in North America and/or a global footprint, excluding certain publicly traded North American companies for which containerboard production is a less material part of such companies’ overall business mix as compared with KapStone and the other selected public companies:

Cascades Inc.

DS Smith Plc

Graphic Packaging Holding Company

International Paper Company

Mondi plc

Packaging Corporation of America

Smurfit Kappa Group plc

WestRock Company
Rothschild reviewed, among other things:

market capitalization of equity, adjusted for net debt, minority interests and investments in associates and joint ventures (referred to as EV) as a multiple of earnings before interest, taxes, depreciation and amortization, pro forma for recent acquisitions and dispositions (referred to as EBITDA) estimated for 2018 (such multiple, referred to as EV/18E EBITDA); and

EV as a multiple of EBITDA estimated for 2018 less capital expenditures estimated for 2018 (such multiple, referred to as EV/18E EBITDA — CAPEX).
The overall low to high EV/18E EBITDA observed for the selected companies were 5.7x to 10.0x, with a median of 8.6x. Rothschild noted that EV/18E EBITDA observed for KapStone was 8.5x based on publicly available research analysts’ consensus estimates per FactSet. Based on its professional judgment, Rothschild applied a selected range of EV/18E EBITDA of 8.0x to 9.0x to the projected EV/18E EBITDA of KapStone, based on the KapStone forecasts, which indicated an approximate implied value per KapStone share reference range of  $31.00 to $37.00, as compared to the KapStone cash consideration of $35.00 per KapStone share.
The overall low to high EV/18E EBITDA — CAPEX observed for the selected companies were 9.4x to 15.9x, with a median of 13.0x. Rothschild noted that EV/18E EBITDA — CAPEX observed for KapStone was 12.0x based on publicly available research analysts’ consensus estimates per FactSet. Based on its professional judgment, Rothschild applied a selected range of EV/18E EBITDA — CAPEX of 12.0x to 13.0x to the projected EV/18E EBITDA — CAPEX of KapStone, based on the KapStone forecasts, which indicated an approximate implied value per KapStone share reference range of  $33.00 to $37.00, as compared to the KapStone cash consideration of  $35.00 per KapStone share.
As part of its selected public companies analysis, Rothschild also created an alternative range of multiples intended to address consensus estimates not yet updated for the price increases, which were announced on the afternoon of January 26, 2018, the last trading day prior to the delivery of Rothschild’s opinion. Rothschild calculated the percentage variation between the then-current publicly available research analysts’ consensus estimates for KapStone’s 2018 EBITDA and KapStone’s 2018 projected EBITDA without giving effect to the price increases. Rothschild used this percentage variation (which was 4.8% for EV/18E EBITDA and 2.2% for EV/18E EBITDA — CAPEX) to correspondingly adjust the multiple range for EV/18E EBITDA and EV/18E EBITDA — CAPEX (which were based on KapStone’s 2018 projected EBITDA after giving effect to the price increases). This methodology resulted in an adjusted EV/18E EBITDA range of 7.0x to 8.0x, which indicated an approximate implied per KapStone share reference range of  $25.00 to $31.00, and an adjusted EV/18E EBITDA — CAPEX range of 10.0x to 11.0x, which indicated an approximate implied per KapStone share reference range of  $25.00 to $29.00, in each case, as compared to the KapStone cash consideration of  $35.00 per KapStone share.
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No company utilized in the selected public companies analysis is identical to KapStone. In evaluating the selected companies, Rothschild made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of KapStone, such as the impact of competition on the businesses of KapStone and the industry generally, industry growth and the absence of any adverse material change in the financial condition and prospects of KapStone or the industry or in the financial markets in general. Mathematical analysis (such as determining the median) is not in itself a meaningful method of using selected company data.
Financial data of the selected companies were based on publicly available research analysts’ consensus estimates, public filings and other publicly available information. Financial data of KapStone was based on publicly available research analysts’ estimates, public filings and the KapStone forecasts.
Selected Precedent Transactions Analysis
Rothschild reviewed and considered publicly available financial information of the following 17 selected transactions (referred to as the selected transactions), which Rothschild in its professional judgment considered generally relevant for comparative purposes and which involved containerboard and paper packaging companies since 2008, focusing primarily on recent transactions involving pure-play containerboard and paper packaging companies, each with enterprise values greater than $200 million, and including any transactions involving KapStone or WestRock, for which information was publicly available:
Date Announced
Target
Acquirer
Mar-08
Weyerhaeuser Company
International Paper Company
Jan-11
Smurfit-Stone Container Corporation
Rock-Tenn Company
Feb-11
Tharco Packaging, Inc.
Boise Inc.
Jun-11
Temple-Inland Inc.
International Paper Company
Jan-12
Svenska Cellulosa Aktiebolaget SCA
DS Smith Plc
Jun-12
Korsnas AB
Billerud AB
Sep-12
Orange County Container Group LLC
Smurfit Kappa Group plc
Jun-13
Longview Fibre Paper and Packaging, Inc.
KapStone Paper and Packaging Corporation
Sep-13
Boise Inc.
Packaging Corporation of America
Jan-15
MeadWestvaco Corporation
Rock-Tenn Company
Feb-15
Duropack GmbH
DS Smith Plc
May-15
Victory Packaging, L.P.
KapStone Paper and Packaging Corporation
Sep-16
Powerflute Oyj
Madison Dearborn Partners, LLC
Jan-17
Multi Packaging Solutions International Limited
WestRock Company
Jun-17
Indevco Management Resources, Inc.
DS Smith Plc
Oct-17
International Paper Company’s North America Consumer Packaging Business
Graphic Packaging Holding Company
Dec-17
Powerflute Group Holdings Oyj
Mondi plc
Rothschild reviewed, among other things, the ratio of EV to EBITDA for the last twelve-month period available prior to the announcement of each selected transaction (referred to as EV/EBITDA).
The overall low to high EV/EBITDA observed for the selected transactions were 5.7x to 13.1x, with a median of 8.6x. Rothschild applied a selected range of EV/EBITDA of 8.5x to 10.0x to the historical EBITDA of KapStone for the twelve months ended December 31, 2017, which historical EBITDA was based on preliminary financial results for the twelve months ended December 31, 2017, provided by KapStone’s management as of January 18, 2018, that had then not yet been publicly disclosed, which indicated an approximate implied value per KapStone share reference range of  $23.00 to $30.00, as compared to the KapStone cash consideration of  $35.00 per KapStone share.
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No target company utilized in the selected precedent transactions analysis is identical to KapStone. In evaluating the selected transactions, Rothschild made judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of KapStone, such as the impact of competition on the businesses of KapStone and the industry generally, industry growth and the absence of any adverse material change in the financial condition and prospects of KapStone or the industry or in the financial markets in general. Mathematical analysis (such as determining the median) is not in itself a meaningful method of using selected transactions data.
Financial data of the selected transactions, and the target companies therein, were based on public filings and other publicly available information. Financial data of KapStone was based on the KapStone forecasts.
Discounted Cash Flow Analysis
Rothschild performed a discounted cash flow analysis, which calculates an implied value per share by discounting to the present the value of unlevered free cash flow for 2018 to 2024, based on the KapStone forecasts, assuming the tax changes and the price increases, and adding thereto a terminal value for KapStone calculated using a range of terminal growth rates from 2.0% to 3.0%. In its analysis, Rothschild utilized a range of discount rates from 8.5% to 9.5%, which was selected based on the estimated weighted average cost of capital of KapStone. The foregoing analysis indicated an approximate implied value per KapStone share reference range of  $22.00 to $32.00, as compared to the KapStone cash consideration of $35.00 per KapStone share.
Other Factors
Rothschild also noted for the KapStone board certain additional factors that were not considered in its financial analyses with respect to its opinion, but that were referred to for informational purposes.
Specifically, Rothschild reviewed with the KapStone board the following, in each case, as compared to the KapStone cash consideration of  $35.00 per KapStone share:

the trading low and high range of KapStone shares for the six-month period ended January 26, 2018 of approximately $20.00 to $27.00;

the approximate implied value per KapStone share reference range of  $32.00 to $35.00, based on the closing stock price of KapStone shares as of January 26, 2018 and a one-day premium of 20% to 30%, which is the range observed in publicly announced or completed U.S. transactions in the last five years with an enterprise value between $2.5 billion and $7.5 billion, excluding transactions with financial institution and real estate targets;

the generally available public market trading price targets for KapStone shares prepared and published by research analysts, which ranged from approximately $21.00 to $30.00;

the present value of the future price of KapStone shares (referred to as the PV of future KapStone share price) implied by KapStone’s projected EBITDA and net debt for 2019 and 2020, based on the KapStone forecasts, discounted at a rate of 12.2%, which was selected based on the estimated cost of equity of KapStone; this methodology implied an approximate implied value per KapStone share reference range of  $30.00 to $36.00; and

the PV of future KapStone share price implied by KapStone’s projected EBITDA for 2019 and 2020, as adjusted for the price increases using the methodology described above in “Selected Public Companies Analysis”, which implied an approximate implied value per KapStone share reference range of  $25.00 to $31.00.
Miscellaneous
The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth herein, without considering the analyses or the summary as a whole, could create an incomplete view of the
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processes underlying Rothschild’s opinion. In arriving at its fairness determination, Rothschild considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered. Rather, Rothschild made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transaction used in the analyses described herein as a comparison is directly comparable to KapStone or the mergers.
Rothschild prepared the analyses described herein for purposes of providing its opinion to the KapStone board as to the fairness, from a financial point of view, to KapStone stockholders of the KapStone cash consideration of  $35.00 per KapStone share. These analyses do not purport to be appraisals or necessarily reflect the prices at which businesses or securities actually may be sold. Rothschild’s analyses were based in part upon the KapStone forecasts and other third party research analyst estimates, which are not necessarily indicative of actual future results and which may be significantly more or less favorable than suggested by Rothschild’s analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties to the merger agreement or their respective advisors, none of KapStone, WestRock, Holdco, Rothschild or any other person assumes responsibility if future results are materially different from those forecasted by KapStone’s management or third parties.
As described above, the opinion of Rothschild to the KapStone board was one of many factors taken into consideration by the KapStone board in making its determination to approve the mergers. Rothschild was not asked to, and did not, recommend the specific consideration to KapStone stockholders provided for in the merger agreement, which consideration was determined through arms-length negotiations between KapStone and WestRock. Rothschild did not recommend any specific amount of consideration to KapStone stockholders or the KapStone board or that any specific amount of consideration constituted the only appropriate consideration for the mergers.
Rothschild is acting as financial advisor to KapStone in connection with the mergers and will be entitled to receive a fee of approximately $22 million, $5 million of which became payable upon delivery of its opinion and the balance of which is contingent upon the consummation of the mergers. In addition, KapStone agreed to reimburse certain of Rothschild’s expenses and indemnify Rothschild against certain liabilities that may arise out of its engagement. Rothschild or its affiliates may, in the ordinary course of their business from time to time, in the future provide financial services to KapStone, WestRock, Holdco and/or their respective affiliates and may receive fees for the rendering of such services. Rothschild and its affiliates are engaged in a wide range of financial advisory and investment banking activities.
In the ordinary course of their asset management, merchant banking and other business activities, Rothschild’s affiliates may trade in the securities of KapStone, WestRock, Holdco and any of their respective affiliates, for their own accounts or for the accounts of their affiliates and customers, and may at any time hold a long or short position in such securities.
Moelis & Company LLC
KapStone retained Moelis to act as its financial advisor in connection with the mergers. In connection with Moelis’ engagement, the KapStone board requested that Moelis evaluate the fairness, from a financial point of view, to KapStone stockholders of the KapStone cash consideration payable to KapStone stockholders in the mergers pursuant to the terms of the merger agreement. On January 25, 2018, Moelis presented its preliminary financial analysis of KapStone to the KapStone board. On January 28, 2018, at a meeting of the KapStone board held to evaluate the mergers, Moelis rendered to the KapStone board an oral opinion, confirmed by delivery of a written opinion, dated January 28, 2018, to the effect that, as of the date of the opinion, based on and subject to the qualifications, conditions, limitations and assumptions set forth in Moelis’ written opinion, the KapStone cash consideration to be received by KapStone stockholders pursuant to the merger agreement is fair, from a financial point of view, to KapStone stockholders.
The full text of Moelis’ written opinion, dated January 28, 2018, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Moelis in connection with such opinion, is attached to this proxy statement/prospectus as Annex C. The description of Moelis’ opinion set forth in this proxy statement/prospectus is qualified in its entirety by reference to the
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full text of Moelis’ opinion. Moelis’ opinion was provided for the use and benefit of the KapStone board (solely in its capacity as such) in its evaluation of the mergers. Moelis’ opinion is limited solely to the fairness, from a financial point of view, of the KapStone cash consideration and does not address KapStone’s underlying business decision to effect the mergers or the relative merits of the mergers as compared to any alternative business strategies or transactions that might be available with respect to KapStone. Moelis’ opinion does not constitute a recommendation as to how any KapStone stockholder should vote, make any election (including without limitation, a stock election), or act with respect to the mergers or any other matter.
In arriving at its opinion, Moelis, among other things:
(i)
reviewed certain publicly available business and financial information relating to KapStone, including publicly available research analysts’ financial forecasts;
(ii)
reviewed certain internal information relating to the business, earnings, cash flow, assets, liabilities and prospects of KapStone furnished to Moelis by KapStone, including the 2018 – 2024 forecasts, which were provided to and discussed with Moelis by KapStone’s management (such 2018 – 2024 forecasts are more fully described in the section entitled “— Certain KapStone Forecasts”, beginning on page 95);
(iii)
conducted discussions with members of the senior management and representatives of KapStone concerning the information described in (i) and (ii) above, as well as the business and prospects of KapStone generally;
(iv)
reviewed publicly available financial and stock market data of certain other companies in lines of business that Moelis deemed relevant;
(v)
reviewed the financial terms of certain other transactions that Moelis deemed relevant;
(vi)
reviewed a draft, dated January 28, 2018, of the merger agreement;
(vii)
reviewed a draft, dated January 28, 2018, of the form of voting agreement to be entered into by WestRock and certain KapStone stockholders;
(viii)
participated in certain discussions and negotiations among representatives of KapStone and WestRock and their advisors; and
(ix)
conducted such other financial studies and analyses and took into account such other information as Moelis deemed appropriate.
In connection with its review, with the consent of the KapStone board, Moelis relied on the information supplied to, discussed with or reviewed by Moelis for purposes of its opinion being complete and accurate in all material respects. Moelis did not assume any responsibility for independent verification of any of such information. With the consent of the KapStone board, Moelis relied upon, without independent verification, the assessment of KapStone and its legal, tax, regulatory and accounting advisors with respect to legal, tax, regulatory and accounting matters. With respect to the KapStone forecasts, Moelis assumed, at the direction of the KapStone board, that such forecasts were reasonably prepared on a basis reflecting the best currently available estimates and judgments of the management of KapStone as to the future performance of KapStone, including with respect to the effects of the recently enacted federal tax legislation, and the recently announced price increases for certain of KapStone’s products. Moelis expressed no views as to the reasonableness of the KapStone forecasts or the assumptions on which they were based. In addition, with the consent of the KapStone board, Moelis did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet, or otherwise) of KapStone, nor was Moelis furnished with any such evaluation or appraisal.
Moelis’ opinion did not address KapStone’s underlying business decision to effect the mergers or the relative merits of the mergers as compared to any alternative business strategies or transactions that might be available to KapStone. Moelis’ opinion did not address any legal, regulatory, tax or accounting matters. At the direction of the KapStone board, Moelis was not asked to, and did not, offer any opinion as to any terms of the merger agreement or any aspect or implication of the mergers (including, without limitation, the fairness or value of the KapStone stock consideration or the relative fairness of the KapStone cash
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consideration and the KapStone stock consideration), except for the fairness of the KapStone cash consideration from a financial point of view to KapStone stockholders. With the consent of the KapStone board, Moelis expressed no opinion as to what the value of Holdco shares, including any Holdco shares received in connection with any stock election, actually will be when issued pursuant to the mergers or the prices at which Holdco shares may trade at any time. In rendering its opinion, Moelis assumed, with the consent of the KapStone board, that the final executed form of the merger agreement and the voting agreements would not differ in any material respect from the drafts that Moelis reviewed, that the mergers would be consummated in accordance with its terms without any waiver or modification that could be material to Moelis’ analysis, and that the parties to the merger agreement and voting agreements would comply with all the material terms of the merger agreement and voting agreements, as applicable. Moelis also assumed, with the consent of the KapStone board, that all governmental, regulatory or other consents or approvals necessary for the completion of the mergers will be obtained, except to the extent that could not be material to Moelis’ analysis.
Moelis’ opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Moelis as of, the date of the opinion, and Moelis assumed no responsibility to update its opinion for developments after the date of the opinion. Certain data underlying Moelis’ analysis and opinion pre-dates (and/or does not reflect the impact of) recently enacted federal tax legislation. The financial and stock markets have been adjusting to the impacts of such legislation, and Moelis expressed no opinion or view as to any potential effects of such impacts on KapStone, WestRock or the mergers.
Summary of Financial Analyses of KapStone
The following is a summary of the material financial analyses presented by Moelis to the KapStone board at its meeting held on January 28, 2018, in connection with its opinion. The following summary describes the material analysis underlying Moelis’ opinion but does not purport to be a complete description of the analyses performed by Moelis in connection with its opinion.
Some of the summaries of financial analyses below include information presented in tabular format. In order to fully understand Moelis’ analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the analyses. Considering the data described below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Moelis’ analyses.
Selected Public Companies Analysis.   Moelis performed a selected public companies analysis, which was intended to provide a range of implied values of KapStone by comparing certain of its financial information with corresponding financial information of similar public companies. In performing this analysis, Moelis reviewed certain financial and stock market information relating to selected publicly traded companies in the integrated containerboard and corrugated packaging industry, with revenues and enterprise values greater than $1 billion and significant geographic reach in North America and/or a global footprint, excluding certain publicly traded North American companies for which containerboard production is a less material part of such companies’ overall business mix as compared with KapStone and the other selected public companies. The following table indicates the companies reviewed by Moelis:
North America Paperboard
Europe Paperboard
International Paper Company
Mondi plc
WestRock
Smurfit Kappa Group plc
Packaging Corporation of America
DS Smith plc
Graphic Packaging Holding Company
Cascades Inc.
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Financial data for the selected public companies was based on Wall Street research analyst consensus forecasts, public filings and other publicly available information and included, as appropriate, adjustments for one-time items, stock-based compensation and material acquisitions. Although none of the selected companies is directly comparable to KapStone, the companies included were selected because they are companies that, for purposes of this analysis, had certain characteristics that may be considered reasonably comparable to KapStone.
As part of its selected public companies analysis, Moelis calculated and analyzed each selected company’s implied enterprise value (calculated as equity value, plus total debt and minority interest, less cash) and multiples of earnings before interest, taxes, depreciation and amortization and other non-cash and non-recurring expenses or gains (referred to as EBITDA) based on publicly available consensus research analysts’ EBITDA estimates for the estimated calendar year 2018 (referred to as CY 2018P) (all of which estimates were issued prior to price increases on containerboard products announced on January 26, 2018 by KapStone and International Paper Company). The implied enterprise value to CY 2018P EBITDA multiples of the selected public companies as of January 26, 2018 are summarized below:
Selected Companies
Enterprise
Value
($ in millions)
Enterprise
Value/CY2018P
EBITDA
North America Paperboard Companies
International Paper Company
36,685 8.5x
WestRock
24,634 8.5x
Packaging Corporation of America
14,362 9.9x
Graphic Packaging Holding Company
9,049 8.8x
Cascades Inc.
2,354 5.8x
Mean
8.3x
Median
8.5x
Europe Paperboard Companies
Mondi plc
15,211 7.9x
Smurfit Kappa Group plc
12,380 7.3x
DS Smith plc
9,816 8.8x
Mean
8.0x
Median
7.9x
All Selected Companies
Mean
8.2x
Median
8.5x
In reviewing the characteristics of the selected public companies for purposes of determining a reference range, Moelis noted that (i) it viewed International Paper Company and WestRock as more similar to KapStone than the other selected public companies based on certain business and financial characteristics, (ii) a discount to Packaging Corporation of America (referred to as PCA) was appropriate at the high end of the reference range given PCA’s leading operational and financial metrics and asset quality, (iii) it deemed Cascades Inc. as less relevant to KapStone due to material differences in margin profile, geography and product mix and (iv) it also considered the trading multiples of the selected European paperboard companies.
Moelis further noted that each of the selected companies has certain attributes which limit their comparability to KapStone, such as: (i) Graphic Packaging Holding Company primarily produces boxboard, sells to consumer-facing end users and manufactures only a small amount of containerboard at one of its mills; (ii) approximately 20% and 24% of Mondi plc’s business consists of consumer-facing plastic packaging products and uncoated fine paper, respectively; (iii) both International Paper Company and PCA have white paper mills that produce sizeable amounts of uncoated free sheet; (iv) Cascades Inc. is levered to
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the Canadian geography, competes heavily in the tissue segment and has a less competitive cost structure that has resulted in EBITDA margins far below the rest of the selected companies; (v) WestRock has an established containerboard presence in Brazil and a consumer packaging footprint across North America, Europe and Asia; (vi) International Paper Company has operations in Brazil, Europe and India; (vii) approximately 73% of Smurfit Kappa Group plc’s EBITDA is generated in Europe; and (viii) DS Smith plc’s operations were primarily confined to Europe up until its recent acquisition of Interstate Resources.
Based on the foregoing analysis and its professional judgment and experience, Moelis selected a multiple range of 8.0x to 9.25x CY 2018P EBITDA and applied the selected range to KapStone’s CY 2018P EBITDA based on the 2018 – 2024 forecasts provided by KapStone’s management to calculate an implied range of values per KapStone share. This resulted in a reference range of  $30.58 to $37.42 per KapStone share, which compares to the KapStone cash consideration of  $35.00 per KapStone share. Moelis noted that the reference range was derived using multiples of selected public companies based on consensus estimates issued prior to the price increases announced on containerboard products on January 26, 2018 by KapStone and International Paper Company, applied to KapStone’s CY 2018P EBITDA included in the 2018 – 2024 forecasts provided by KapStone’s management, which included the impact of the price increase (such 2018 – 2024 forecasts are more fully described in the section entitled “— Certain KapStone Forecasts”, beginning on page 95).
Selected Precedent Transactions Analysis.   Moelis compared selected financial and transaction metrics of the KapStone merger with similar data (where available) of selected transactions involving integrated containerboard and paper-based packaging production and converting companies since 2008, focusing primarily on the transactions that occurred after 2011 and recent transactions involving pure-play corrugated packaging converting businesses, each with enterprise values greater than $200 million, and including any transactions involving KapStone or WestRock, for which information was publicly available.
The selected precedent transactions were selected with respect to KapStone because they represented in Moelis’ view the transactions most relevant to the mergers. Moelis noted that the data underlying the selected precedent transactions analysis pre-dates (and/or does not reflect the impact of) recently enacted federal tax legislation. Moelis also noted that all of the selected precedent transactions were completed prior to the price increases for containerboard products announced on January 26, 2018.
For each of the selected precedent transactions, Moelis calculated valuation multiples based on information that was publicly available, focusing on the ratio of transaction value (enterprise value) to EBITDA for the identified target company for the most recent reported twelve month period (referred to as LTM) as of the announcement date of the transaction, adjusted to exclude one-time charges and benefits.
In reviewing the characteristics of the selected precedent transactions for purposes of determining a reference range, Moelis noted that it (i) viewed (a) the International Paper Company/Weyerhaueser Company’s CP&R Business, (b) RockTenn/Smurfit Stone Container Corporation, (c) International Paper Company/Temple-Inland Inc. and (d) KapStone/Longview Fibre Paper and Packaging, Inc. transactions as most relevant, as each reflected either a similar mill or integrated corrugated packaging transaction, (ii) considered DS Smith plc/Interstate Resources Inc. to be a relevant transaction but noted that the transaction was announced on June 29, 2017, with the transaction value (referred to as TV) multiple based on calendar year 2016 EBITDA, which did not fully capture product price increases that were announced in late 2016 and early 2017, (iii) considered the overall median TV multiple of the selected transactions and (iv) discounted smaller transactions and transactions in which the target company’s core business was outside the United States or reflected primarily converting businesses.
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The precedent transactions considered were:
Announcement
Date
Acquirer
Target
TV
TV/LTM
EBITDA
(millions)
Dec 2017 Mondi plc Powerflute Oyj 365 8.7x
Oct 2017 Graphic Packaging Holding Company International Paper’s N.A.
Consumer Packaging
$ 1,800 8.6x
Jun 2017 DS Smith plc Interstate Resources Inc. $ 1,376 13.1x
Jan 2017 WestRock Multi Packaging Solutions
International Limited
$ 2,280 9.6x
Sep 2016 Madison Dearborn Partners LLC Powerflute Oyj $ 354 5.7x
May 2015 KapStone Victory Packaging, L.P. $ 615 11.2x
Feb 2015 DS Smith plc Duropack GmbH 300 7.3x
Jan 2015 RockTenn MeadWestvaco Corporation $ 10,041 10.3x
Sep 2013 Packaging Corporation of America Boise Inc. $ 1,995 6.7x
Jun 2013 KapStone Longview Fibre and Packaging Inc. $ 1,025 8.7x
Sep 2012 Smurfit Kappa Group plc Orange County Container Group
LLC
$ 340 6.4x
Jun 2012 Billerud AB Korsnas AB $ 1,562 7.0x
Jan 2012 DS Smith plc Svenska Cellulosa Aktiebolaget SCA