Boise Cascade Corporation Becomes OfficeMax Incorporated, Focuses on Its
Office Products Distribution Business
BOISE, Idaho, Oct. 29 /PRNewswire-FirstCall/ -- Boise Cascade Corporation
(NYSE: BCC) announced today that it has completed the sale of its paper,
forest products, and timberland assets for approximately $3.7 billion to
affiliates of Boise Cascade, LLC, a new company formed by Madison Dearborn
Partners LLC.
Effective November 1, 2004, Boise Cascade Corporation will change its
company name to OfficeMax Incorporated. It will continue to operate its
office products distribution business as its principal business. OfficeMax
will trade on the New York Stock Exchange under the ticker symbol OMX, and its
corporate headquarters will be in Itasca, Illinois. The new OfficeMax website
address is http://www.officemax.com.
"This transaction completes Boise's transformation, begun in the
mid-1990s, from a predominantly manufacturing-based company to a world-scale
distribution company," said George J. Harad, executive chairman of OfficeMax.
"It establishes OfficeMax as a strong, independent company in the office
products distribution business." Harad previously served as chairman and
chief executive officer of the company under its prior name.
Chris Milliken, president, chief executive officer, and a director of
OfficeMax, said, "OfficeMax will strive to be the leading provider of office
products and services through a relentless focus on our customers. We will
succeed by providing our customers with an unparalleled customer experience --
in service, in product, in time savings, and in value."
The total value of the transaction is approximately $3.7 billion.
OfficeMax will initially realize approximately $2.0 billion in cash and
timberland installment notes of $1.65 billion. We expect to monetize
approximately 90% of the timberland notes over the 45 to 60 days following the
sale. After allowing for our $175 million investment in Boise Cascade, LLC,
and its affiliates and transaction-related settlements, net cash proceeds
should total approximately $3.2 billion.
Through debt repurchases and retirements, OfficeMax is expected to reduce
its balance sheet debt to between $250 million and $300 million over the
coming months. As of November 1, 2004, the company will have repaid
$588 million of bank debt. The company expects to repurchase approximately
$1 billion of its public debt securities when it completes its current debt
tender offer, which is currently set to expire on November 5, 2004. After the
planned monetization of the timberland installment notes, the company expects
to make further reductions in its debt.
The company expects ultimately to return $800 million to $1 billion of the
overall transaction proceeds to shareholders through common and/or preferred
stock buybacks, cash dividends, or a combination. As part of this equity
return, the company will redeem $115 million of its Series D (ESOP) preferred
stock by November 1, 2004. On December 16, OfficeMax will issue common stock
to redeem its mandatorily convertible preferred securities (NYSE: BEP).
Following that settlement, the company will announce its plans for further
returning equity to shareholders.
Shareholders will retain the same interest in OfficeMax that they had in
the former Boise Cascade Corporation. No new stock certificates are required,
but if shareholders wish, they may exchange certificates by contacting
OfficeMax Shareholder Services at (208) 384-7056.
Assets Sold to Boise Cascade, LLC
The privately held Boise Cascade, LLC, with headquarters in Boise, Idaho,
will continue to operate Boise Cascade Corporation's former paper, forest
products, and timberland assets.
W. Thomas Stephens is the newly named chief executive officer of Boise
Cascade, LLC. Stephens is the former president and chief executive officer of
MacMillan Bloedel Ltd. and the former chairman, chief executive officer, and
president of Manville Corporation.
Included in the sale to Boise Cascade, LLC, 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 posted sales of $3.0 billion in the first nine months of
2004.
Boise Paper Solutions, a manufacturer of uncoated free sheet papers --
office papers, printing papers, forms bond, envelope papers, and value-added
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 sales of $1.5 billion in the first nine months of 2004.
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.
Boise Cascade, LLC, will continue to operate these paper, forest products,
and timberland assets from its headquarters in Boise, Idaho, and virtually all
current employees and supporting corporate staff will be offered employment by
Boise Cascade, LLC.
About OfficeMax
OfficeMax is a leader in both business-to-business and retail office
products distribution. OfficeMax delivers an unparalleled customer
experience -- in service, in product, in time savings, and in value -- through
a relentless focus on its customers. The company provides office supplies and
paper, technology products and solutions, and furniture to large, medium, and
small businesses and consumers. OfficeMax customers are served by more than
40,000 associates through direct sales, catalogs, the Internet, and more than
900 superstores. The business had sales of $6.6 billion in the first nine
months of 2004.
Webcast and Conference Call
OfficeMax will host an audiovisual webcast and conference call on
November 1, 2004, at 10:30 a.m. Eastern Time, at which we will discuss the
details of the close of this transaction. Slides will be posted on our
website at 10:20 a.m. You can join the webcast through the OfficeMax website.
Go to http://www.officemax.com, and 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 audio
software. 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. The archived webcast will be available on the Presentations page of
the Investor Relations section of OfficeMax's website.
Press kit materials, including a press release, fact sheets, executive
bios, photographs, and other items on Boise Cascade, LLC, and OfficeMax, are
available on the Internet at http://www.bc.com/media.htm and at
http://www.officemax.mediaroom.com.
Forward-Looking Statements
This press release contains forward-looking statements about Boise's sale
of assets to affiliates of Madison Dearborn Partners, the repayment of debt,
and the return of proceeds to shareholders. 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. 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 OfficeMax. 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 retail and contract
businesses 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
OfficeMax (previously filed as Boise Cascade Corporation) with the Securities
and Exchange Commission and available at the Securities and Exchange
Commission's Internet site (http://www.sec.gov). OfficeMax 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.officemax.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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