A: WestRock, $65.45, symbol WRK on New York (Shares outstanding: 254.8 million; Market cap: $16.6 billion; www.westrock.com), is a leading provider of packaging materials and systems. It operates through about 302 locations across North America, South America, Europe and Asia.

WestRock was formed by the July 1, 2015, merger of Rock-Tenn Company and Mead-Westvaco Corporation.

The combined company has made a number of divestitures and acquisitions over the last few years to focus on its core paper and packaging businesses.

In May 2016, WestRock completed the spinoff of its specialty chemicals business, Ingevity Corp. (symbol NGVT on New York). In January 2017, it also sold its home, health and beauty packaging business to Silgan Holdings (symbol SLGN on Nasdaq) for $1.025 billion. That business made soap dispensers and perfume sprayers.

In June 2017, the company bought Multi Packaging Solutions International for $2.28 billion. That firm makes print-based specialty packaging, including premium folding cartons, inserts, labels and rigid packaging. Its customers are in the growing healthcare and consumer markets, which include spirits, confectionary, and beauty and cosmetics businesses.

More recently, in January 2018, WestRock completed the acquisition of Plymouth Packaging. Plymouth is a corrugated packaging company that makes roughly 70% of its sales from its “Box on Demand” systems, and 30% from traditional corrugated box packaging. WestRock has yet to disclose the purchase price.

Plymouth places those market-leading “Box on Demand” systems on site at customers’ warehouses and manufacturing operations. The machines then produce custom, on-demand corrugated packaging that is accurately sized for any product type based on the customer’s specifications. This lowers a firm’s packaging and shipping costs compared to traditional corrugated boxes. Box on Demand is particularly useful for firms that are rapidly expanding their e-commerce shipping.

Plymouth was founded in 1991 by Paul Magnell and was owned by the Magnell family prior to the sale. Greg Magnell served as president of the company and will remain with WestRock.

WestRock is now buying KapStone Paper and Packaging Corp. for $3.5 billion. The purchase will let it expand further into packaging for online shopping. KapStone, based in Northbrook, Illinois, makes specialty containerboard, corrugated boxes and specialty papers. The deal will add to WestRock’s operations in the western U.S. and to its specialty-paper offerings.

In addition, the purchase lets WestRock acquire KapStone’s mills. They’re scarce, capital-intensive assets that can be controversial to build due to environmental concerns. WestRock expects the deal to immediately increase its earnings and create about $200 million in potential cost savings.

In the fiscal year ended September 30, 2017, the company’s revenue rose 4.9%, from $14.2 billion in 2016 (the first fiscal year in its current form) to $14.9 billion. Earnings rose 2.7%, to $670.6 million, or $2.62 a share, from $653.0 million, or $2.53.

WestRock’s revenue for its fiscal 2018 first quarter, ended December 31, 2017, was $3.89 billion. That’s up 13.0% from $3.45 billion a year earlier. The increase came from higher selling prices and the increased sale of high-profit-margin packaging.

The Multi Packaging Solutions acquisition, in particular, added sales, which offset a loss of revenue due to the sale of WestRock’s Home Health & Beauty business. Overall earnings in the quarter, excluding one-time items, jumped 87.8%, to $226.0 million, or $0.87 a share, from $120.3 million, or $0.47, a year earlier.

The company holds cash of $312.3 million, or $1.23 a share. WestRock’s long-term debt of $5.4 billion is a reasonable 33% of its market cap. The company raised its quarterly dividend by 7.5% with the November 2017 payment, to $0.43 from $0.40. The shares now yield 2.6%.

WestRock’s growth by acquisition adds risk. However, it is now well-positioned in the fastest-growing areas of the packaging industry. Apart from rapidly expanding demand for e-commerce packaging, there are new opportunities in the market for bags made of kraft paper. That unbleached, strong grade of paper is often seen in grocery stores and restaurants—especially as states and cities ban plastic shopping bags. (San Francisco was the first U.S. city to ban plastic shopping bags in 2007, and the state of California banned them at major retailers in 2014.)

The stock currently trades at 16.9 times the company’s forecast 2018 earnings of $3.88 a share.

WestRock is okay to hold.