Packaging Corp. of America, Lake Forest, Ill., the fourth-largest U.S. producer of corrugated shipping boxes, agrees to buy Boise Inc. for about $1.27 billion, to boost capacity. The deal includes $714 million of Boise’s debt and will close in the fourth quarter, they say. The takeover will increase Packaging Corp.’s containerboard production capacity by 42% to 3.7 million tons a year and boost the company’s presence in the Pacific Northwest, the companies say.

“This acquisition allows us to apply our operating and sales expertise across a much larger system and provides significant growth potential,” says Packaging Corp. CEO Mark Kowlzan in a statement. The combined companies generated $5.5 billion in sales and $879 million in earnings before interest, taxes, depreciation and amortization last year, according to the statement.

Boise, based in Boise, Idaho, also makes newsprint and office paper and owns mills, production facilities and distribution centers in North America and Europe.