BOISE, Idaho (AP) _ Boise Cascade Corp. announced Monday it has agreed to sell its paper and timber assets for $3.7 billion.
The Idaho-based company said the sale to a new company formed by Madison Dearborn Partners LLC, a Chicago investment firm, should be completed by mid-November. The new company will be privately held and named Boise Cascade L.L.C. It will be headquartered in Boise.
Boise Cascade will change its name to OfficeMax, acquiring the name of the Cleveland-based office products seller it bought a year ago for $1.2 billion in cash and stock. It will be headquartered in Itasca, Ill., outside Chicago.
The spinoff and name change marks the completion of the review of the company's future launched with the OfficeMax purchase, Boise Cascade Chairman George Harad said Monday.
Harad, who will be the chairman of the board of OfficeMax, said the separation of the businesses complete's Boise Cascade's transformation ``from a predominantly manufacturing-based company to a world-scale distribution company.''
Chris Milliken, who currently heads Boise Cascade's office products division, will serve as OfficeMax president. The combination of the OfficeMax and Boise Cascade office products operations created the third-largest office products retailer in the nation with combined annual sales of over $8 billion.
The remaining timber and paper manufacturing company will be headed by W. Thomas Stephens, former president of MacMillan Bloecdel Ltd., a Canadian forest products company acquired in 1999 by Weyerhaeuser Co.
Boise Cascade will sell off 22 wood products facilities in the United States, Canada and Brazil, 27 wholesale building distribution centers in the United States, ownership or control of more than $2.3 million acres of timber, five pulp and paper mills, two paper converting plants, six distribution centers and five corrugated container plants.
The new office products company is retaining an interest in the timberland to secure any additional return for shareholders. Harad said land sales in Idaho that had been put up for bid previously will be finalized.
Harad said the company expects to realize up to $3.2 billion (the difference of $500 million will be spent on transaction costs, taxes and other expenses) with teh transaction, and will use two-thirds of that to be used to pay down outstanding debt.
``At the end of the day, we hope to have between $800 million and $1 billion to return to shareholders, either preferred or common shareholders,'' Harad said. ``On balance we think this is the best transaction for shareholders. It creates certainty for shareholders and customers.