Rock-Tenn Company Agrees to Acquire Southern Container Corp.

NORCROSS, Ga.--(Business Wire)--Rock-Tenn Company (NYSE:RKT) today announced that it has agreed to
acquire the stock of Southern Container Corp. ("Southern Container"),
a privately-held containerboard manufacturing and corrugated packaging
business, for $851 million in cash. Rock-Tenn expects that Southern
Container will have approximately $142 million in debt outstanding
immediately after the acquisition. Southern Container operates the
720,000 ton per year Solvay mill, located near Syracuse, NY, one of
the lowest cost recycled containerboard mills in North America, as
well as eight integrated corrugated box plants, two sheet plants, and
four high impact graphics facilities. Consolidated net sales of the
acquired business for the 52 week period ended September 8, 2007 were
$538 million. All corporate approvals of the transaction have been
received. The closing is subject to Hart-Scott-Rodino review and other
customary closing conditions. Rock-Tenn plans to finance the
acquisition with proceeds from $1.4 billion in new credit facilities
and the sale of unsecured senior notes. The $1.4 billion will provide
the Company with funding to complete the acquisition, refinance the
Company's existing credit facilities and provide in excess of $200
million of undrawn capacity. Wachovia Bank, N.A., Bank of America and
SunTrust Bank and certain affiliates of each have committed to provide
$1.4 billion in a combination of new credit facilities and bridge
financing to support this transaction. The new credit facilities will
be secured with certain assets of Rock-Tenn and Southern Container.
Additionally, Rock-Tenn's existing senior notes will share the
collateral under the terms of the indenture dated July 31, 1995.
Wachovia Capital Markets, LLC acted as financial advisor to Rock-Tenn
on the transaction. Rock-Tenn expects to close the acquisition in late
March 2008.

Rock-Tenn's Chairman and Chief Executive Officer, James Rubright
said, "We believe Southern Container represents a unique opportunity
for Rock-Tenn to expand our corrugated and merchandising display
businesses. Our strategy has been to expand and improve our businesses
by acquiring very low cost, well invested assets. Southern Container
fits this strategy perfectly. It has consistently earned industry
leading EBITDA margins with its low cost Solvay mill, modern box plant
system and preprint graphics capability."

The purchase price including debt of Southern Container represents
a multiple of approximately 6.9 times Southern Container's Pro Forma
EBITDA (as hereinafter defined) for the 52 week period ended September
8, 2007. Rock-Tenn and Southern Container expect to make an IRC
section 338(h) (10) election that will increase Rock-Tenn's tax basis
in the acquired assets and result in a net present value benefit of
approximately $150 million, net of gross-up tax payments to be made to
Southern Container's shareholders as a result of the election.
Including the net present value of the benefit of the tax basis
step-up, the purchase price represents approximately 5.8 times
Southern Container's Pro Forma EBITDA for the 52 week period ended
September 8, 2007.

Conference Call

The Company will host a conference call to discuss details of the
transaction and other topics on January 11, 2008 at 9:00 AM ET. The
call is being webcast and can be accessed, along with a copy of the
press release and other relevant financial and statistical information
related to the transaction, at www.rocktenn.com.

About Rock-Tenn Company

Rock-Tenn Company is one of North America's leading manufacturers
of packaging products, merchandising displays and bleached and
recycled paperboard. The Company has annual net sales of approximately
$2.3 billion and operating locations in the United States, Canada,
Mexico, Chile and Argentina.

Statements herein regarding the anticipated closing date of the
purchase, the terms, amount, timing and availability of anticipated
financing for the acquisition, cost reductions, synergies and
transitional costs to achieve the synergies and the timing of such
costs and synergies constitute forward-looking statements within the
meaning of the federal securities laws and are subject to certain
risks and uncertainties. With respect to these statements, the Company
has made assumptions regarding, among other things, whether and when
the proposed purchase will be approved; whether and when the proposed
purchase will close; the availability of financing on satisfactory
terms; results and impacts of the proposed purchase; economic,
competitive and market conditions generally; volumes and price levels
of purchases by customers; competitive conditions in our businesses
and possible adverse actions of our customers, our competitors and
suppliers. Management believes its assumptions are reasonable;
however, undue reliance should not be placed on such estimates, which
are based on current expectations. There are many factors that impact
these forward-looking statements that the Company cannot predict
accurately. Further, the Company's and Southern Container's businesses
are subject to a number of general risks that would affect any such
forward-looking statements including, among others, decreases in
demand for their products; increases in energy, raw materials,
shipping and capital equipment costs; reduced supply of raw materials;
fluctuations in selling prices and volumes; intense competition; the
potential loss of certain customers; and adverse changes in general
market and industry conditions. Such risks and other factors that may
impact management's assumptions are more particularly described in the
Company's filings with the Securities and Exchange Commission,
including under the caption "Business -- Forward-Looking Information"
and "Risk Factors" in the Company's Annual Report on Form 10-K for the
most recently ended fiscal year. The information contained herein
speaks as of the date hereof and the Company does not have or
undertake any obligation to update such information as future events
unfold.

Non-GAAP Measures

We have included financial measures that are not prepared in
accordance with accounting principles generally accepted in the United
States ("GAAP"). Any analysis of non-GAAP financial measures should be
used only in conjunction with results presented in accordance with
GAAP. Below, we define the non-GAAP financial measures, provide a
reconciliation of each non-GAAP financial measure to the most directly
comparable financial measure calculated in accordance with GAAP, and
discuss the reasons that we believe this information is useful to
management and may be useful to investors. These measures may differ
from similarly captioned measures of other companies in our industry.

Pro Forma EBITDA (as defined)

We have defined Pro Forma EBITDA to reflect (1) EBITDA, which is
defined as earnings (net income) before interest (interest expense and
interest income), taxes, depreciation and amortization, and (2)
certain additional adjustments to (a) add back the minority interest's
share of earnings of the Solvay mill, because such interests have been
acquired by Southern Container, (b) eliminate a portion of
compensation expense to the former owners of Southern Container and
eliminate expense related primarily to fair value adjustments on
contracts assumed. Rock-Tenn management uses Pro Forma EBITDA in
evaluating operations because it believes the adjustments reflected in
Pro Forma EBITDA remove the effects of factors that are not
representative of a company's core ongoing operations or otherwise
distort trends in underlying operating results.

Our definitions of EBITDA (as defined) and Pro Forma EBITDA (as
defined) may differ from other similarly titled measures at other
companies. EBITDA (as defined) and Pro Forma EBITDA (as defined) are
not defined in accordance with GAAP and should not be viewed as
alternatives to GAAP measures of operating results or liquidity.
Rock-Tenn management believes that net income is the most directly
comparable GAAP measure to EBITDA (as defined) and that pro forma net
income is the most directly comparable GAAP measure to Pro Forma
EBITDA (as defined).

We believe EBITDA (as defined) and Pro Forma EBITDA (as defined)
of Southern Container provide useful information to investors for the
following reasons:

Rock-Tenn management used EBITDA (as defined) and Pro Forma EBITDA
(as defined) of Southern Container as the starting measure for our
financial evaluation of the purchase price we would pay for the
acquired business. We either added or deducted the financial impact of
various assumptions and judgments necessary to estimate the future
earnings that we would expect to realize from the acquired business,
which included assumptions regarding (a) our estimated future capital
expenditures, (b) the future tax depreciation we would experience
based on the step-up in the tax basis of the acquired assets resulting
from the purchase under the IRC section 338(h) (10) election, (c) the
expected interest costs we would incur on debt required to finance the
acquisition, (d) the expected combined state and federal income tax
rates on resulting income before income taxes and (e) numerous other
matters that could impact the future earnings of the business.

Management also believes such measures provide useful information
to investors because we anticipate that the credit facilities used to
finance the proposed acquisition will include a covenant that will be
expressed as a ratio of our total indebtedness to a defined measure of
consolidated EBITDA and consolidated Pro Forma EBITDA. We anticipate
that failure to comply with the covenant would constitute an event of
default under the credit agreement that could adversely affect our
liquidity. We also anticipate that information about this covenant may
be material to an investor's understanding of Rock-Tenn's financial
condition or liquidity. We believe that we have calculated EBITDA (as
defined) and Pro Forma EBITDA (as defined) of the acquired business in
a manner generally consistent with the calculation that will be
contained in the credit agreement. However, because we have not yet
finalized the credit agreement, it is possible that the actual
calculation may differ from the calculation we have shown.

-0-
*T
Southern Container reconciliation of Net Income to EBITDA (as defined)
(in Millions):

52 Weeks Ended 52 Weeks Ended
September 8, December 30,
2007 2006
-------------- ---------------

Net Income $ 67.2 $ 57.4
Interest expense and interest income,
net 8.1 10.7
Income tax expense 2.2 1.5
Depreciation and amortization 46.1 44.8
-------------- ---------------
EBITDA (as defined) $ 123.6 $ 114.4
============== ===============
*T

-0-
*T
Southern Container reconciliation of EBITDA to Pro Forma EBITDA (as
defined) (in Millions):

52 Weeks Ended 52 Weeks Ended
September 8, December 30,
2007 2006
-------------- ---------------

EBITDA (as defined) $ 123.6 $ 114.4
Pro forma adjustments
Solvay minority interest (a) 9.2 10.4
Compensation and other expense (b) 11.4 14.3
-------------- ---------------
Pro Forma EBITDA (as defined) $ 144.2 $ 139.1
============== ===============
*T

(a) We have added back the minority interest in the earnings of
the Solvay mill subsidiary, which interests have been acquired by
Southern Container Corp. Accordingly, we believe it is appropriate to
add back the minority interest in the earnings of the subsidiary for
the period presented as the full earnings of the subsidiary will be
consolidated with our results following the acquisition.

(b) We have eliminated a portion of compensation expense to the
former owners of Southern Container and other expense related
primarily to fair value adjustments on contracts assumed. We believe
it is appropriate to add back these items for the period presented as
these items will not be incurred after the acquisition.

Rock-Tenn Company
Investor Relations, 678-291-7900

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