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Boise to Acquire Tharco Packaging for $200 Million
Feb. 22, 2011 (Press Release) - Boise Inc. and Tharco Packaging, Inc., today announced that their respective boards of directors have approved an agreement under which Tharco will be acquired from an investor group led by Tricor Pacific Capital, Inc. The $200 million all-cash transaction will result in Tharco becoming a wholly-owned subsidiary of Boise and is expected to close in early March 2011. Tharco offers an extensive range of corrugated products and services that complements and expands Boise's existing packaging business. For fiscal 2010, ended September 30, 2010, Tharco had revenue of $261 million and shipped 2.3 billion square feet of corrugated products. "This step is consistent with our strategy to profitably grow our packaging business and create value for our shareholders and customers," said Alexander Toeldte, president and chief executive officer of Boise Inc. "Acquiring Tharco achieves several important goals: it expands our presence in packaging markets, which are growing long term, and is a good geographical fit, extending our reach from the Pacific Northwest to California, Colorado, Arizona, and Georgia. It is consistent with our goal to increase our containerboard integration with our downstream corrugated converting operations to over 85% from approximately 70% today. This reduces our exposure to export markets and enhances margins. "When complete, we expect annualized synergies of approximately $8 million, achieved primarily through the increased integration," said Mr. Toeldte. "We anticipate these synergies will be fully realized in 18 months. The acquisition will be financed using cash on hand and existing revolver capacity, with no material change to our leverage profile. We expect the transaction to be accretive to our earnings in the first year." Other benefits of the transaction include opportunities to profitably grow in adjacent packaging businesses, including stock boxes and multi-material engineered packaging solutions. "Tharco's established business and brands are well respected, profitable, and fit well with our existing businesses," said Mr. Toeldte. "Tharco has an experienced management team, dedicated and engaged employees, and a proven track record." "Boise meets all the criteria we would want in a parent company," said Bo Fears, chief executive officer of Tharco. "We are pleased to join a successful, forward-thinking, and growing public company that is committed to the packaging industry." Tharco employs approximately 900 employees at 11 manufacturing and distribution facilities across the country. "This is an exciting time for both organizations," Toeldte added. "We will continue to serve all our customers with distinction and drive improvements in all our operations." SOURCE: Boise Inc. |