Boise Inc. sale raises questions

The impact on the company’s Downtown headquarters staff is uncertain.

krodine@idahostatesman.comSeptember 17, 2013 

This file photo shows Boise Inc.'s Nampa processing plant, which creates corrugated cardboard for custom boxing.


The $1.27 billion sale of Boise Inc. to Packaging Corp. of America will create a “premier packaging company,” likely with fewer cuts at Boise headquarters than observers might expect, Boise Inc.’s CEO said Monday.

“This creates a really strong company that will be very well-positioned to compete,” Alexander Toeldte told the Idaho Statesman. “Our two systems of mills and converting plants happen to fit extremely well together, and that creates a whole mix of opportunities.”

The sale likely will bring significant change at Boise Inc.’s corporate headquarters but little change at the company’s packaging plants and paper mills across the nation, including a plant in Nampa, a spokeswoman said.

The sale to the Illinois company brings a surprising end to Boise Inc., a 5-year-old firm that is Idaho’s third-largest publicly traded company.

Boise Inc. employs 5,400 people across the nation and beyond. In the Treasure Valley, nearly 450 people work at Boise Inc.’s corporate headquarters, 25 at the company’s trucking operation in Boise and about 140 at its packaging plant in Nampa.

Boise Inc. is based in the Boise Plaza Building, the former home of Boise Cascade Corp., from which Boise Inc. is descended.

Boise Cascade was an iconic Idaho company that fell on hard times more than a decade ago. In 2004 it bought OfficeMax, assumed the OfficeMax name, and moved its headquarters to the Chicago area. Office Max promptly sold most of its interest in the former Boise Cascade timberlands, paper-making business, and wood products and building materials distributions divisions to a Chicago private-equity company. That company sold the paper, packaging and newsprint operation in 2008 to a pair of investors who turned it into the publicly traded Boise Inc.

Boise Inc. shares the Boise Plaza with another Boise Cascade Corp. descendent: Boise Cascade Co., which kept the old Boise Cascade Corp.’s operations in wood products and building materials. Boise Cascade returned to public ownership in February.


Toeldte said he holds out hope for Boise Inc.’s corporate hub.

“Our corporate headquarters is an excellent service organization that provides outstanding service at very low cost, and that will be an important factor for PCA to consider and may, although that’s not certain, create quite a bit of opportunity for our people, more than one might normally expect,” he said.

Asked whether he would have a role in the future company, Toeldte said, “I don’t know. We haven’t discussed that. But companies don’t typically have two CEOS.”

Aulin said the mood at the company’s headquarters Monday was mixed.

“People understand the business rationale,” she said, “but there’s a lot of pride in Boise Inc., so there are mixed feelings.”

The fate of the Boise Inc. name has yet to be determined. “That will be up to PCA,” Boise Inc. spokesman Virginia Aulin said.

It’s also uncertain what this will mean for the company’s involvement in the Treasure Valley community, she said.

That involvement includes an annual United Way campaign and sponsorships of the “Bodies” exhibit at the Discovery Center and this month’s Women in Leadership conference at Boise State University. A Boise Inc. volunteer committee lends a hand to numerous community efforts, from the Idaho Shakespeare Festival to the Idaho Foodbank, from Winter Garden Aglow to Dress for Success, she said.

Toeldte said the purchase will create opportunities for investment by the combined business in Boise Inc. operations, which are found in 17 states, Mexico, Canada, Spain and the Netherlands.

“We look forward to working with the employees of Boise as we integrate our businesses,” Packaging Corp. CEO Mark Kowlzan said in a joint news release from the companies. “I am confident that together, we will achieve significant operating benefits.”

The Boise Inc. purchase will broaden Packaging Corp.’s geographic reach to the Northwest and increase the company’s containerboard capacity from 2.6 million tons to 3.7 million tons.

Both companies’ boards unanimously approved the acquisition, which is expected to close in the fourth quarter of this year.


“Our board and management team have thoroughly evaluated a broad range of strategic options for Boise, and we believe this transaction is the best way to maximize value for our shareholders,” Boise Inc. board chairman Carl Albert said in the news release.

Boise Inc. has about 100 million outstanding shares, Aulin said.

Packaging Corp. offered a premium on Boise Inc. stock, agreeing to pay $12.55 per share — 26 percent more than Boise Inc.’s $9.96 closing price on Friday. Shares of Boise slightly exceeded that point by the close of trading Monday, rising $2.60 to reach $12.56. Packaging Corp.’s stock gained $5.88, or 10.78 percent, to reach $60.43 by Monday’s close.

“The fact that we have received a premium offer is a manifestation of the performance and dedication of our employees ... and the value we have created in a very challenging economic environment,” Toeldte said.

A Packaging Corp. affiliate will start a tender offer to acquire Boise’s stock. That tender offer must be started within 10 days and remain open for at least 20 business days after launch.

The companies put the deal’s total value at approximately $2 billion, which includes $714 million of Boise’s outstanding debt. The company began its corporate life five years ago with more than $1 billion in debt.

Aulin stressed that the impacts of the purchase won’t truly be known until late this year, when the sale is set to be finalized.

“Until the deal closes, we’ll be continuing to conduct business as usual,” she said.

Kristin Rodine: 377-6447

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