| PAPER INDUSTRY NEWS - AUGUST 2002 |
This page contains pulp and paper industry news for August 2002
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NEWS AUGUST 2002
Georgia-Pacific To Sell Majority Stake In Its Unisource
Aug. 14, 2002 - Georgia-Pacific Corp. said yesterday that it has agreed to sell a controlling 60 percent interest in its Unisource Worldwide paper distribution subsidiary to Bain Capital, a global private investment firm.
GP expects the transaction to result in approximately $850 million in after-tax proceeds. In addition, the company will retain 40 percent ownership of Unisource and will provide $170 million in seller financing.
GP said that the net proceeds of the transaction will be used to reduce debt.
As part of the transaction, which is expected to close during the fourth quarter 2002, GP will enter into a sale-leaseback agreement with third parties for certain real estate assets now owned by Unisource. These assets will be sub-leased to Unisource. This sale-leaseback agreement will generate approximately $150 million of the expected $850 million in after-tax proceeds to Georgia-Pacific.
Georgia-Pacific's 40 percent interest will be held by CP&P Inc., the company's subsidiary formed to hold its consumer products, packaging, and pulp and paper businesses.
Closing of the transaction is subject to a number of conditions, including completion of satisfactory financing, negotiation and execution of satisfactory agreements, and other customary closing conditions.
"After thorough review and consideration of our alternatives, our decision to sell a controlling interest in Unisource is based on two strategic factors," said A.D. "Pete" Correll, chairman and chief executive officer, Georgia-Pacific. "First, the value of the original synergies in the combination of Unisource and our uncoated paper manufacturing business was realized in our sale last year of the majority of those assets to Domtar Inc. And second, since that divestiture, Unisource would have limited strategic fit with either our consumer products and packaging businesses or our building products and distribution businesses once separation of our company occurs."
Correll added, "We believe we have negotiated a value for Unisource that is attractive to our shareholders, and that retaining an interest in Unisource will enable us to benefit from the expected improvement in business performance. The reduction of debt from this transaction also will strengthen our balance sheet in preparation for our upcoming separation."
About Unisource
Unisource, one of the largest distributors of packaging systems, printing and
imaging papers and maintenance supplies in North America, was purchased by
Georgia-Pacific in July 1999 and has conducted business as a separate
distribution subsidiary since that time.
About Bain
Bain Capital is a global private investment firm that owns private equity,
venture capital, fixed income and public market fund advisors with over $14
billion in assets under management. Bain Capital has made private equity
investments and add-on acquisitions in over 225 companies in a variety of
industries, including distribution and business services companies. Bain Capital
partners with exceptional management teams in order to build long-term value in
its portfolio companies. Headquartered in Boston, Bain Capital has offices in
New York, San Francisco, London, and Munich.
SOURCE: Georgia-Pacific Corp.
Tuscarora Buys Packaging Resources Group
Aug. 29, 2002 - Tuscarora Inc. said that it has reached a definitive agreement to purchase the assets of Packaging Resources Group, including two manufacturing facilities located in Longmont and Fort Collins, Colorado. The expected closing date is August 30, 2002.
Packaging Resources, headquartered in Longmont, is a manufacturer of custom-designed protective packaging made from molded and fabricated polyethylene and polystyrene foams, mold-in-place polyurethane foam, loose- fill, corrugated sheets and wood. Various manufacturers, including the electronics and high technology hardware industries, utilize its protective products.
Tuscarora currently operates stand-alone integrated materials and foam molding plants in Colorado Springs, Colorado. To serve customers more efficiently, Tuscarora will consolidate its integrated materials plant in Colorado Springs into the acquired plant in Longmont. The foam molding plant in Fort Collins will be consolidated into Tuscarora's molding plant in Colorado Springs.
David C. O'Leary, president & CEO of Tuscarora, said, "Packaging Resources is a complementary fit with Tuscarora's existing protective packaging business in the Colorado front range market."
Tuscarora said that its design and testing center will be relocated from Colorado Springs to Longmont. The transition of business should be completed by the end of October. Approximately 35 employees are affected by this consolidation and will have an opportunity for employment consideration in the Colorado plants, other Tuscarora facilities or separation benefits.
Tuscarora Incorporated custom designs and manufactures protective packaging, material handling and components for a wide range of consumer and industrial products utilizing a variety of materials that include molded and die-cut expanded foam plastics, corrugated paperboard, wood, and thermoformed plastics, used singularly or in combination. Tuscarora serves customers from over 35 manufacturing facilities regionally located throughout the United States and Mexico.
Tuscarora is a division of SCA North America.
SOURCE: Tuscarora Incorporated
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