Boise Cascade to Shed Assets

Boise Cascade Corp. said Monday that it was exiting the paper, building products and timberland businesses and selling the assets for about $3.2 billion in cash to focus on its office supply operation.

The businesses are being sold to private equity firm Madison Dearborn Partners, which created a company called Boise Cascade and will hire Boise Cascade Corp.’s management and a portion of its 55,000 employees.

Formed nearly 50 years ago, Boise Cascade Corp. has sought to get out of the less reliable paper and building materials businesses.

It will change its name to OfficeMax, taking the name of the office products retailer that it bought in December 2003.

The deal was long awaited by Wall Street, and some analysts contended that the benefits of the deal were already built into the stock price.

Its shares fell 6 cents to $32.99 on the New York Stock Exchange after jumping 8% initially.

The company will receive $3.1 billion to $3.2 billion in cash from the deal, which is expected to close by mid-November. Including Boise Cascade’s $175-million reinvestment in the company, $165 million in timber notes and $200 million to $300 million in transaction-related settlements, the deal is valued at $3.7 billion.

Boise plans to use $2.2 billion to $2.3 billion to pay down debt, and $800 million to $1 billion would be returned to shareholders through share buybacks, cash dividends or both, the company said.

Madison Dearborn will continue to be based in Boise, Idaho, and will have supply agreements with OfficeMax. OfficeMax headquarters will move to Itasca, Ill., from Boise.

Boise Cascade was formed in 1957 when Boise Payette Lumber Co. merged with Cascade Lumber Co., and the company built its first paper mill the next year.

Boise Cascade owns 2.4 million acres of U.S. timberland and operates about 25 building-products mills, five paper mills and nearly 30 wholesale building-material distribution centers.