Xpedex and Unisource Merger Going Ahead in 2014.
Unisource Worldwide, Inc. and xpedx Agree to Merge New publicly held Distribution Company to create enhanced platform for profitable growth across Packaging, Print and Facility Solutions.
NORCROSS, Ga., Jan. 28, 2014. Distribution solutions businesses Unisource Worldwide, Inc. ("Unisource") and xpedx will merge under the terms of a definitive agreement that would result in the creation of a new publicly traded company. The agreement to merge the two businesses was signed by International Paper. A parent company of xpedx, and by UWW Holdings, Inc. the holding company of Unisource and owned indirectly by an affiliate of Bain Capital and by Georgia-Pacific, as well as certain of their affiliates.
Upon the expected completion of the merger in mid-2014, which is subject to certain closing conditions, the new company will have projected annual revenue in the range of $9 billion to $10 billion and will have about 9,500 team members across more than 170 distribution centers in North America. The new company is expected to generate approximately $200 million in synergies.
Allan Dragone, chief executive officer of Unisource, said, "This merger will create a new company with A unique capabilities that will enable better service to customers across their core business segments of packaging, print and facility solutions. Building upon the strengths of both Unisource and xpedx, we believe the new company will be able to accelerate and enhance top-line growth opportunities across a complementary portfolio." Seth Meisel, a member of the Unisource board of directors and a managing director at Bain Capital, stated, "By bringing together these two businesses, we will be able to provide customers with innovative solutions and ideas to solve their toughest challenges in product packaging and fulfillment, paper and print management, supply chain and logistics services, and facility solutions. The new company will offer an unmatched combination of reach, product depth and service capabilities."
The transaction will be accomplished through a Reverse Morris Trust structure. International Paper will contribute the assets of xpedx to a newly formed wholly owned subsidiary, xpedx Holding Company, in exchange for the stock of the subsidiary, a cash payment of approximately $400 million expected to be financed with new debt in the new company's capital structure, as well as the potential for an additional cash payment pursuant to an "earn-out" in the sixth year after closing. The subsidiary will be spun off into a new company. Following the spinoff of the new company to International Paper shareholders, UWW Holdings, Inc. will immediately thereafter merge with and into the new company. Immediately following such a merger, Unisource will merge with xpedx. In connection with the merger, the shares of UWW Holdings, Inc., will be converted into a number of shares of the new company such that, following the merger, approximately 51 percent of shares of the new public company will be owned by International Paper shareholders, with the remaining approximately 49 percent of shares held by a new holding company, UWW Holdings, LLC.
The new company intends to apply to list its shares for trading on the New York Stock Exchange. UWW Holdings, LLC may request to register its shares of the new company with the SEC for resale beginning 180 days following the closing of the merger, pursuant to the terms of a Registration Rights Agreement to be entered into between the new company and UWW Holdings, LLC.
To finance the cash payment to International Paper and refinance existing debt of Unisource, the new company has entered into a commitment with three banks for $1.4 billion of asset-backed financing. The new company's debt-to-EBITDA ratio is targeted to be in the range of 4-5. The new company will be well positioned to generate solid cash flow for operations and reinvestment in the business while adequately servicing its debt.
The new company's executive offices will be located in the greater Atlanta area. In addition, the new company will retain the two existing operational headquarters of the legacy companies in Norcross, Ga., and Loveland, Ohio.
Quick Pak Inc is expanding and has openings for outside industrial packaging sales personel and inside sales.
NORCROSS, Ga., Jan. 28, 2014. Distribution solutions businesses Unisource Worldwide, Inc. ("Unisource") and xpedx will merge under the terms of a definitive agreement that would result in the creation of a new publicly traded company. The agreement to merge the two businesses was signed by International Paper. A parent company of xpedx, and by UWW Holdings, Inc. the holding company of Unisource and owned indirectly by an affiliate of Bain Capital and by Georgia-Pacific, as well as certain of their affiliates.
Upon the expected completion of the merger in mid-2014, which is subject to certain closing conditions, the new company will have projected annual revenue in the range of $9 billion to $10 billion and will have about 9,500 team members across more than 170 distribution centers in North America. The new company is expected to generate approximately $200 million in synergies.
Allan Dragone, chief executive officer of Unisource, said, "This merger will create a new company with A unique capabilities that will enable better service to customers across their core business segments of packaging, print and facility solutions. Building upon the strengths of both Unisource and xpedx, we believe the new company will be able to accelerate and enhance top-line growth opportunities across a complementary portfolio." Seth Meisel, a member of the Unisource board of directors and a managing director at Bain Capital, stated, "By bringing together these two businesses, we will be able to provide customers with innovative solutions and ideas to solve their toughest challenges in product packaging and fulfillment, paper and print management, supply chain and logistics services, and facility solutions. The new company will offer an unmatched combination of reach, product depth and service capabilities."
The transaction will be accomplished through a Reverse Morris Trust structure. International Paper will contribute the assets of xpedx to a newly formed wholly owned subsidiary, xpedx Holding Company, in exchange for the stock of the subsidiary, a cash payment of approximately $400 million expected to be financed with new debt in the new company's capital structure, as well as the potential for an additional cash payment pursuant to an "earn-out" in the sixth year after closing. The subsidiary will be spun off into a new company. Following the spinoff of the new company to International Paper shareholders, UWW Holdings, Inc. will immediately thereafter merge with and into the new company. Immediately following such a merger, Unisource will merge with xpedx. In connection with the merger, the shares of UWW Holdings, Inc., will be converted into a number of shares of the new company such that, following the merger, approximately 51 percent of shares of the new public company will be owned by International Paper shareholders, with the remaining approximately 49 percent of shares held by a new holding company, UWW Holdings, LLC.
The new company intends to apply to list its shares for trading on the New York Stock Exchange. UWW Holdings, LLC may request to register its shares of the new company with the SEC for resale beginning 180 days following the closing of the merger, pursuant to the terms of a Registration Rights Agreement to be entered into between the new company and UWW Holdings, LLC.
To finance the cash payment to International Paper and refinance existing debt of Unisource, the new company has entered into a commitment with three banks for $1.4 billion of asset-backed financing. The new company's debt-to-EBITDA ratio is targeted to be in the range of 4-5. The new company will be well positioned to generate solid cash flow for operations and reinvestment in the business while adequately servicing its debt.
The new company's executive offices will be located in the greater Atlanta area. In addition, the new company will retain the two existing operational headquarters of the legacy companies in Norcross, Ga., and Loveland, Ohio.
Quick Pak Inc is expanding and has openings for outside industrial packaging sales personel and inside sales.
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