Boise Cascade Corporation Completes Sale of Paper, Building Products, and Timberland Assets
October 29 2004 - 3:06PM
PR Newswire (US)
Boise Cascade Corporation Completes Sale of Paper, Building
Products, and Timberland Assets 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. DATASOURCE: Boise
Cascade Corporation 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 Web site:
http://www.officemax.com/
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