GP and Bain Announce definitive Agreement for Sale Of Stake in Unisource
Tuesday, October 01, 2002
ATLANTA, Sept. 30 -- Georgia-Pacific Corp. and Bain Capital today announced they have reached a definitive agreement under which Bain Capital will acquire a controlling, 60 percent interest in Georgia-Pacific's Unisource paper distribution subsidiary. Georgia-Pacific expects the transaction to result in approximately $825 million in after-tax proceeds. In addition, Georgia-Pacific will retain 40 percent ownership of Unisource and will hold a note from Unisource for $170 million. Bank of America and Citigroup's Salomon Smith Barney have committed to provide Bain Capital with senior bank financing for the transaction. The net proceeds of the transaction will be used by Georgia-Pacific to reduce debt. As part of the transaction, which is expected to close during the fourth quarter 2002, Georgia-Pacific 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 $825 million in after-tax proceeds to Georgia-Pacific. Following completion of the transaction, Georgia-Pacific will record an income tax benefit of $170 million, which also is included in the expected proceeds. Closing of the transaction is subject to regulatory approval and satisfaction of customary closing conditions, including completion of the bank financing and transition agreements. "This transaction represents a fair value for our shareholders and moves us forward in our strategic direction," said A.D. "Pete" Correll, Georgia- Pacific chairman and chief executive officer. "The cash proceeds will be used to reduce debt and strengthen our balance sheet, and our minority stake will enable us to benefit from the expected improvement in business performance." Ed Conard, Bain Capital managing director, said, "We are excited about partnering with Unisource's strong management team and Georgia-Pacific to help move the business forward toward the next phase in its development by seizing new opportunities in the marketplace and by leveraging our competitive strengths." 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. Unisource employs approximately 10,000 people worldwide.