* * *
Establishes Boise Office Solutions as Independent Office Products Distributor
Under OfficeMax Name
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Completes Review of Strategic Alternatives
BOISE, Idaho, July 26 /PRNewswire-FirstCall/ -- Boise Cascade Corporation
(NYSE: BCC) announced today that it has reached a definitive agreement to sell
its paper, forest products, and timberland assets for approximately
$3.7 billion to affiliates of Boise Cascade, L.L.C., a new company formed by
Madison Dearborn Partners LLC (MDP), a leading private equity investment firm
located in Chicago, Illinois.
According to George J. Harad, chairman and chief executive officer, this
step marks the completion of the company's review of strategic alternatives,
originally announced in July 2003. "The transaction we are announcing today
will complete Boise's transformation, begun in the mid-1990s, from a
predominantly manufacturing-based company to a world-scale distribution
company. By separating the company into two ongoing entities, we will
successfully establish Boise Office Solutions, soon to be OfficeMax, as a
strong independent company in the office products distribution business and
place our paper and forest products assets in the hands of a management team
that seeks to focus on those businesses. In the process, we will realize
significant value for shareholders," Mr. Harad said. "I want to personally
extend my thanks and appreciation to all Boise employees who have endured with
grace and continued hard work a year of uncertainty as we acquired OfficeMax,
reviewed strategic alternatives, and reached this successful milestone."
Following the transaction, Boise Cascade Corporation will change its
company and trade name to OfficeMax, Inc. It will continue to operate its
office products distribution business, which had annualized first half 2004
sales of $8.6 billion, as its principal business. Through debt retirement and
repurchases, OfficeMax is expected to reduce its outstanding debt to between
$250 million to $300 million and be well positioned for continued growth. It
will trade on the New York Stock Exchange under the ticker symbol OMX, and its
corporate headquarters will be in Itasca, Illinois.
When the transaction is completed, George J. Harad, currently chairman and
chief executive officer of Boise Cascade Corporation, will become executive
chairman of the board of OfficeMax, Inc. Chris Milliken, currently division
president and chief executive officer for Boise Office Solutions, will be
elected president and chief executive officer of OfficeMax, Inc.
Boise will realize approximately $3.1 billion to $3.2 billion in cash
proceeds after allowing for its $175 million reinvestment in Boise Cascade,
L.L.C., and its affiliates, a retained interest in a timberland installment
note, and certain transaction-related settlements. Boise currently expects to
use approximately $2.2 billion to $2.3 billion of the net proceeds to pay down
debt and other obligations and return the remaining $800 million to
$1.0 billion of proceeds to shareholders through common and/or preferred stock
buybacks, cash dividends, or a combination.
The transaction is expected to be completed by mid-November 2004. The
acquiring company, Boise Cascade, L.L.C., will be privately held and
headquartered in Boise, Idaho. Its chief executive officer will be W. Thomas
Stephens, former president and chief executive officer of MacMillan Bloedel
Ltd. and former chairman, chief executive officer, and president of Manville
Corporation.
"In many respects, this transaction represents a return to Boise Cascade's
traditional roots as a leader in the paper and forest products industry," said
Mr. Stephens. "We will continue to operate under the Boise brand name,
headquartered in Boise, Idaho, with a focus on operational excellence and
delivering value to our customers."
Madison Dearborn Partners is one of the largest and most experienced
private equity firms in the United States. MDP has approximately $8 billion
of equity capital under management and makes new investments through its most
recent fund, Madison Dearborn Capital Partners IV, L.P., a $4 billion
investment fund raised in 2001.
MDP focuses on management buyout transitions and other private equity
investments across a broad spectrum of industries including basic industries,
communications, consumer, financial services, and healthcare. Over the last
decade, MDP has been one of the most active global investors in the paper,
packaging, and forest products sectors, having consummated approximately
$11.7 billion of management buyout transactions over that period, including
Buckeye Technologies Inc., Graphic Packaging International Corp. (formerly
Riverwood International Corp.), Packaging Corporation of America, and
Jefferson Smurfit Group, PLC.
"Madison Dearborn Partners is delighted to enter into this transaction
with Boise," said Samuel M. Mencoff, co-president of MDP. "This acquisition
is consistent with MDP's investment objectives of acquiring industry-leading
companies in partnership with outstanding and committed management teams. We
look forward to working with Tom Stephens and the Boise Cascade management
team as they pursue their strategy as a privately held company focused solely
on their traditional paper and forest products markets."
Included in the sale are the Boise Cascade Corporation headquarters
building in Boise, Idaho, and substantially all of the assets of:
Boise Building Solutions, a major producer of plywood, lumber,
particleboard, and engineered wood products (laminated veneer lumber, wood
I-joists, and laminated beams). Most of Boise's production is sold to
independent wholesalers and dealers and through its own wholesale building
materials distribution outlets. Boise manufactures wood products at
22 facilities in the United States, Canada, and Brazil. Boise's 27 wholesale
building materials distribution facilities in the United States sell a wide
range of building materials to retail lumber dealers, home centers
specializing in the do-it-yourself market, and industrial customers. Boise
Building Solutions' first half 2004 sales totaled $1.9 billion.
Boise Paper Solutions, a manufacturer of uncoated free sheet papers --
office papers, printing papers, forms bond, envelope papers, and value-added
papers. Boise's value-added papers include security papers, specialty base
stocks, financial printing papers, recycled papers, and laser and inkjet
papers. Boise also produces containerboard and corrugated containers,
newsprint, and market pulp. The division operates five pulp and paper mills,
two paper converting facilities, six paper distribution centers, and five
corrugated container plants in the United States. Boise Paper Solutions
recorded first half 2004 sales of $1.0 billion.
Timberlands. Boise owns or controls approximately 2.3 million acres of
timberland in the United States, 35,000 acres of eucalyptus plantation land in
Brazil, and a 16,000-acre cottonwood fiber farm near Wallula, Washington.
J.P. Morgan and Lehman Brothers served as financial advisors and provided
committed financing to Madison Dearborn Partners in connection with this
transaction. Madison Dearborn Partners was represented by the law firm of
Kirkland & Ellis LLP.
Boise's exclusive financial advisor for the transaction is Goldman, Sachs
& Co.
Webcast and Conference Call
Boise will host an audiovisual webcast and conference call on Monday,
July 26, 2004, at 10 a.m. Eastern Daylight Time, at which we will discuss
today's announcement. You can join the webcast through the Boise website at
http://www.bc.com. Click on Investor Relations to find the link to the webcast.
Please go to the website at least 15 minutes before the start of the webcast
to register and to download and install any necessary software. The archived
webcast will be available on the Presentations page of the Investor Relations
section of Boise's website within 90 minutes following the end of the webcast.
To join the conference call, dial (800) 374-0165 -- international callers
should dial (706) 634-0995 -- at least 10 minutes before the start of the
call. A replay of the conference call will be available from 1:30 p.m. EDT on
July 26, 2004, to 1:30 p.m. EDT on August 27, 2004. Callers in the United
States should dial (800) 642-1687 for the replay, and international callers
should dial (706) 645-9291. The access code for both numbers is 9011950.
Press kit materials, including a press release, a fact sheet on Boise,
executive bios, photographs, and other items, are available on the Internet at
http://www.bc.com/media.htm.
Forward-Looking Statements
This press release contains forward-looking statements about Boise's
planned sale of assets to Madison Dearborn Partners and the value we expect
shareholders to realize from the transaction. These forward-looking
statements are subject to a number of risks and uncertainties that could cause
the outcome of these events to differ materially from our expectations today.
There is no assurance the transaction contemplated by this release will be
completed at all or completed upon the same terms and conditions we have
described. The closing of the transaction is conditioned upon a number of
factors, some of which are outside our control. Our plans for the use of the
transaction proceeds, debt repayment, and return of proceeds to shareholders
may change based on intervening or unexpected events, changes in our debt
structure, or unanticipated cash requirements. There are also risks and
uncertainties associated with the future financial performance of the company,
even if the transaction is completed. The success of the company going
forward will depend, among other things, on its future debt structure, the
effect of management changes, and management's continued efforts to integrate
the OfficeMax business while minimizing the disruption to customers,
employees, and other stakeholders. There are additional factors that could
cause results to differ materially from those described in the forward-looking
statements found in this release. You can read about those factors in the
reports filed by Boise with the Securities and Exchange Commission and
available at the Securities and Exchange Commission's Internet site
(http://www.sec.gov). Boise undertakes no obligation to update or revise any
forward-looking information, whether as a result of new information, future
developments, or otherwise.
SOURCE Boise Cascade Corporation
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Related links:
http://www.bc.com/media.htm
http://www.bc.com
CONTACT:
Media, Ralph Poore, +1-208-384-7294, or home,
+1-208-331-2023, or Investors, Vincent Hannity, +1-208-384-6390,
both of Boise Cascade Corporation
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