Boise Cascade agrees to buy OfficeMax for $1.2 billion in cash and stock

Monday, July 14th 2003, 12:00 am
By: News On 6

CLEVELAND (AP) _ Boise Cascade Corp., despite a loss of over $27 million in the first quarter, has agreed to acquire OfficeMax Inc. in a cash and stock deal valued at $1.2 billion, the companies said early Monday.

Boise Cascade will purchase OfficeMax using 30 percent cash and 70 percent common stock, the companies said in a statement. The cash amount could increase if the value of Boise Cascade shares drop.

The deal has already been unanimously approved by both companies' boards of directors and is subject to customary approvals under antitrust laws and by the shareholders of OfficeMax and Boise.

Boise Cascade is a producer of wood and paper that also distributes office products. OfficeMax is the third biggest U.S. office products retailer, behind Office Depot and Staples.

``This business combination gives the newly formulated organization the ability to better serve all channels of the office products market from home offices to small businesses to large corporations,'' Michael Feuer, OfficeMax's co-founder, chairman and chief executive officer, said in a statement. ``Together, OfficeMax with Boise will be strategically and financially stronger and rival the size of its closest competitors.

About half of Idaho-based Boise Cascade's $7.4 billion in revenues comes from selling office products. Buying OfficeMax would allow it to better compete with its competitors.

Boise has been shedding jobs to cut costs and lost $27.5 million or 53 cents a share in the first quarter. Boise's stock has fallen 7 percent this year while shares of OfficeMax have gained 44 percent.