Boise Cascade unit going for $1.6 billion
BOISE, Idaho -- Boise Cascade LLC is selling its paper, packaging and newsprint division for about $1.63 billion to a company formed in February by private equity investors.
Aldabra 2 Acquisition Corp., started by investors Nathan Leight and Jason Weiss of New York-based Terrapin Partners, agreed to pay $1.34 billion in cash and the rest in shares to take over the unit.
Aldabra, which is listed on the American Stock Exchange, said it would change its name after the deal to Boise Paper Co. and seek a listing on either the New York Stock Exchange or Nasdaq Stock Market.
It will be run by Alexander Toeldte, currently Boise Cascade's executive vice president in charge of the paper, packaging and newsprint businesses.
Private equity investor Madison Dearborn Partners, based in Chicago, has owned Boise Cascade since 2004 when it was split from retailer OfficeMax Inc. of Naperville. Private equity firms often buy troubled companies, make changes and cuts and then sell them for gains.
Madison Dearborn, whose chairman, John Canning, is leading an investor group that hopes to buy the Chicago Cubs from Tribune Co., is now shedding divisions of Boise Cascade two years after the investment company failed in its bid to sell shares of the wood products company due to a lack of interest.
"This transaction recognizes the progress we've made during the three years we were a private company," Toeldte said in a statement. "We reinvigorated our culture by taking out layers of overhead, streamlining management processes, and changing our relationship with employees to one of full involvement in running the business."
Madison Dearborn said it plans to keep Boise Cascade's remaining wood products and building materials divisions.
The boards of directors at Aldabra and Boise Cascade have approved the transaction, according to the statement.
The cash being paid in the deal will include about $392 million from Aldabra's trust and about $946 million in new debt.
Shares of Aldabra rose 19 cents, or 2.1 percent, to $9.22 Friday.
Both Boise Paper Co. and Boise Cascade will keep their headquarters in Idaho's capital.