International Paper announced that distribution solutions businesses xpedx and Unisource Worldwide, Inc. will merge under the terms of a definitive agreement that will result in the creation of a new publicly traded company. The agreements providing for the combination of the two businesses were signed by International Paper, parent company of xpedx, and by UWW Holdings LLC, the holding company that owns Unisource and is owned 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.
“This transaction provides excellent value for International Paper shareholders and is a unique opportunity for xpedx and Unisource to create a new company that is stronger, more competitive and able to provide even greater value to customers,” said John Faraci, chairman and CEO of International Paper. “We anticipate the new company will generate synergies of about $200 million.”
“We’re bringing together two well established distribution businesses to create a new company with the financial stability and strategic focus to strengthen and grow our core businesses,” Mary Laschinger, president, xpedx, and senior vice president, International Paper, said. “Combined, the new company will be even better positioned to provide the products, services and ideas to support our customers’ businesses.”
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 Loveland, OH, and Norcross, GA.
Laschinger will be the CEO of the new company and chairman of its board of directors. Allan Dragone, currently president and CEO, Unisource Worldwide, will serve as a director of the new company and will advise on integration activities.