Jari is part of Barueri, Brazil-based forestry products conglomerate Grupo Orsa.

Terms of the deal call for Jari's industrial packaging assets, including three containerboard mills and four box plants to be separated from its pulp and forestry business and transferred to a new holding company in which International Paper will hold a 75% stake.

The plants are mostly in the southeastern region of Brazil, the largest consumer and industrial center in Latin America, said International Paper on a conference call Thursday morning.

"We strengthened our global portfolio by announcing our strategic entry into the corrugated packaging market in Brazil," International Paper president and chairman John V. Faraci said on the call.

International Paper is paying an 8.2 Ebitda multiple for the stake in the assets in question, it said. The assets have an enterprise value of $625 million, 2011 sales of $380 million and Ebitda of $76 million, according to presentation materials accompanying the conference.

"[The deal] allows us to expand a core IP business into a growing market where we already have a meaningful presence," senior vice president Timothy S. Nicholls added on the call. "The case for growth is made easy. Per capita consumption in Brazil [of corrugated boxes and uncoated freesheet] have significant potential for growth as this emerging market continues to expand its middle class."

Nicholls, the executive responsible for International Paper's Latin America operations, said the company should benefit from a jolt in the Brazilian economy by the 2014 World Cup and 2016 Olympics. Rio de Janeiro will host both events.

According to an analysis by International Paper using census and other economic data from the McKinsey Global Institute, and Banco Santander SA, annual per capita consumption for corrugated boxes and uncoated freesheet paper in Brazil stands at 16 and 7.2 kilograms, respectively. This compares to 26 and 8.7 kilograms, respectively, for China and 77 and 36.6 kilograms for the U.S.

Containerboard demand should increase from 3.9 million metric tons in 2011 to 4.9 million metric tons by 2017, a 3.6% compound annual growth rate, while uncoated free sheet paper demand should rise from 1.4 MMT to 1.7 MMT, itself a 3.4% CAGR, according to forest products research firm Risi Inc.

The deal should close early in the first quarter, subject to various closing conditions and governmental approvals. International Paper will use a combination of cash and local financing.

While it's had operations in Brazil for 50 years, IP has invested in other so-called BRIC nations (Brazil, Russia, India and China). In March 2011, IP agreed to acquire a 75% stake in Indian integrated paper manufacturer Andhra Pradesh Paper Mills Ltd. from diversified conglomerate SK Bangur Group in a deal worth up to $361 million.

International Paper said Thursday it recorded net income of $223 million, or 54 cents per share, for the third quarter, compared to net income of $468 million, or $1.08 per share, in the third quarter of 2011, a 52.3% drop. Sales reached $7.1 billion in the most recent quarter, compared to $6.6 billion a year ago.

IP attributed the drop in profits to weak macroeconomic conditions and charges related to its $4.3 billion purchase of Temple-Inland Inc. in September 2011. The deal closed Feb. 14.

Grupo Orsa couldn't be reached Thursday.

International Paper shares fell $1.39, or 3.82%, to $34.99, on Thursday afternoon, giving the company a market capitalization of about $15.3 billion.