Private equity company Clayton, Dubilier & Rice’s (CD&R) affiliate has signed a definitive agreement to acquire packaging products distributor Veritiv.

As per the agreement's terms, CD&R has agreed to pay $170 in cash for each share of Veritiv common stock issued and outstanding immediately, before the completion of the transaction.

This amount represents a nearly 31% premium over Veritiv's 30-day volume-weighted average price of $129.89.

According to a Reuters report, this deal is valued at $2.3bn and will transform Veritiv into a private entity.

Veritiv’s board of directors has given its unanimous approval for the transaction and also recommended its shareholders to vote in favour of it.

Veritiv CEO Sal Abbate said: “CD&R's interest in our company is a testament to our team's hard work, innovation, and dedication. Fueled by this partnership, we will continue to evolve towards our greatest potential, delivering innovative and sustainable solutions to our customers today - and into the future.”

Headquartered in Atlanta, US, Veritiv offers packaging, as well as hygiene products, services, and solutions.

The company serves customers in different industries both in North America and across the globe. It manages distribution centres across the US and Mexico.

CD&R partner Rob Volpe said: “We look forward to supporting Veritiv's talented leadership team in this next phase of the company's growth, as they continue to pursue their long-term strategic objectives while maintaining an unwavering commitment to employees, suppliers, and customers.”

Subject to customary closing conditions, the deal is anticipated to be completed in the fourth quarter of this year.