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Boise Cascade to sell paper, packaging & newsprint assets


September 11, 2007
By Pulp & Paper Canada

BOISE, ID — Boise Cascade has entered into a purchase and sale agreement with Aldabra 2 Acquisition for the sale o…

BOISE, ID — Boise Cascade has entered into a purchase and sale agreement with Aldabra 2 Acquisition for the sale of Boise Cascade’s paper, packaging and newsprint segments for cash and shares of Aldabra common stock equal to approximately $1.625 billion US. As part of the transaction, Aldabra intends to change its name to Boise Paper Company and will apply for listing on either the New York Stock Exchange or NASDAQ. Boise Cascade, a privately held company, will maintain 100% ownership of its wood products and building materials distributions segments following the transaction. Both companies will be headquartered in Boise, Idaho.
Tom Stephens, chairman and CEO of Boise Cascade, said, “This is also good news for the people in our remaining businesses, wood and building materials distribution, who have delivered strong results over the past three years. We will use a portion of the cash received from the transaction to pay down debt. As a well-financed and highly focused company, Wood and BMD will not only be in an excellent position to operate successfully in the challenged housing market but will also have the means to grow. As two separate companies, the businesses will be able to focus sharply on their respective core competencies to enhance performance and returns to investors, customers, and employees.”
Alexander Toeldte will become CEO of Boise Paper Company. He is currently Boise Cascade’s executive vice president, responsible for its paper, packaging & newsprint businesses.
The transaction, which has been approved by the respective board of directors of Aldabra and Boise Cascade, is subject to customary closing conditions as well as (i) the approval of Aldabra’s stockholders (Aldabra’s certification of incorporation provides that if a shareholder chooses not to approve a transaction, the shareholder may convert his or her shares to cash; if less than 40% of Aldabra’s shareholders choose the conversion option, the transaction will be approved); (ii) receipt of approvals under the Hart-Scott-Rodino Act; and (iii) receipt of debt financing on terms and conditions to be approved by Aldabra’s and Boise Cascade’s respective board of directors.
At closing, Aldabra will deliver to Boise Cascade approximately $1.625 billion, of which approximately $1.338 billion will be paid in cash (less $38 million in cash contributed by Boise Cascade at closing) and the balance in shares of Aldabra common stock. The sources of funds for this transaction will consist of (i) approximately $392 million of net proceeds from Aldabra’s trust (which takes into account deferred underwriting fees and expected interest income projected through closing, net of taxes), (ii) approximately $946 million in a new debt facility to be raised in conjunction with the transaction, (iii) less $38 million in cash contributed by Boise Cascade, and (iv) approximately $325 million of new Aldabra shares that will be issued to Boise Cascade.
The number of shares of Aldabra common stock to be issued to Boise Cascade at closing will be calculated by dividing approximately $325 million by the average closing price per share of Aldabra common stock during the 20-day period ending three days prior to the closing of the transaction. The parties have agreed that for purposes of this calculation, the average closing price will not be higher than $10.00 or lower than $9.54. Assuming no conversion rights are exercised and an average closing price of $9.77 (the midpoint of the range), Boise Cascade would receive 34,510,747 shares of Aldabra common stock, representing 40.0% of BPC’s shares post-closing.
Boise’s investment banking advisors on this transaction are JPMorgan and Goldman Sachs, and Kirkland & Ellis LLP is acting as legal advisor.
For more information, see the company’s website at www.bc.com

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