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Georgia-Pacific and Bain Capital Complete Unisource Transaction

Monday, December 02, 2002

Press release from the issuing company

ATLANTA, Nov. 27 -- Georgia-Pacific Corp. and Bain Capital, a leading global private investment firm, today announced that Bain Capital has acquired a controlling, 60 percent interest in Unisource Worldwide Inc., Georgia-Pacific's paper distribution subsidiary. As previously announced, Georgia-Pacific retains a 40 percent minority ownership interest in Unisource and will hold a note from Unisource for $170 million. Georgia-Pacific's after-tax proceeds from the transaction are expected to total approximately $790 million after closing adjustments, which will be used to reduce debt. Under the terms of the transaction, Georgia-Pacific received approximately $470 million, consisting of cash at closing and Unisource funds previously used by Georgia-Pacific to reduce its indebtedness. Georgia-Pacific expects to generate an additional $150 million through completion of a sale-leaseback transaction involving warehouse facilities formerly owned by Unisource that will be sub-leased to Unisource. This sale-leaseback transaction will be reflected as a capital lease obligation on Georgia-Pacific's financial statements. Georgia-Pacific anticipates receiving a $170 million income tax refund related to the transaction in the first half of 2003, which also will be used to reduce debt. "Completion of the sale of a controlling interest in Unisource accomplishes several key objectives for Georgia-Pacific," said A.D. "Pete" Correll, Georgia-Pacific chairman and chief executive officer. "This transaction helps us reduce debt, which strengthens our balance sheet, and results in Georgia-Pacific partnering with a firm with a strong track record of building long-term value." Matt Levin, a managing director at Bain Capital, said, "We are very optimistic about the opportunity to build on Unisource's strong customer and supplier relationships, and look forward to executing a successful long-term growth strategy with the management team. Unisource is a market leader in a big industry that remains committed to serving customers, and is well- positioned to grow." Bank of America and Citigroup's Salomon Smith Barney provided Bain Capital with senior bank financing for the transaction. 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 subsidiary since that time.

 

 

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