Longview Fibre sells eight eastern U.S. box plants
Thursday, March 22, 2007 6:52 AM PDT
By Evan Caldwell
Printable version
E-mail this articleLongview Fibre Co. agreed to sell eight Eastern U.S. box plants on Monday for $80.7 million, the company announced Wednesday.
The plants, which convert paper into corrugated materials such as cardboard, have been on the market for nearly a year. The buyer, Deleware-based U.S. Corrugated Inc., owns several other corrugated operations in the Southeast U.S.
"We took this through an auction process," Steven J. Buhaly, Fibre's chief financial officer, said Wednesday. "We put together an offering document to circulate to as many companies as we could."
The sale stems from Fibre adopting a new operating plan last April, when the company announced it would seek possible buyers for its eastern U.S. plants.
Selling the eight box plants won't affect Fibre's possible $2.5 billion sale to Toronto-based Brookfield Asset Management, which was announced Feb. 5.
"There will be no change to share price," Buhaly said. As part of the agreement with Brookfield, "we required them to approve this transaction."
The deal with Brookfield still needs two-thirds shareholder approval, Buhaly said.
"The proxies have gone out. ... We think it will be another week or two before the bulk of them come in," he said. The deadline is April 19 and the deal could close --- if approved --- in one to two business days after that, Buhaly said.
Fibre divides about 1,400 people at 15 converting plants in 12 states. The deal with U.S. Corrugated includes plants in Amsterdam, N.Y.; Bowling Green, Ky.; Cedar Rapids, Iowa; Fridley, Minn.; Grand Forks, N.D.; Milwaukee, Wis.; Seward, Neb.; and West Springfield, Mass. These eight plants employ about 800 people.
U.S. Corrugated Inc. is a new company, formed last year when Four M Holdings LLC bought LINPAC Inc, which had corrugated packaging facilities including a recycled containerboard mill, three sheet feeders and two sheet converting plants.
U.S. Corrugated representatives could not be reached for comment because its offices were closed when the news was released.
Under the agreement, for three years following the closing date, Fibre may not manufacture, produce, distribute or sell products in certain parts of the eastern and central United States that are similar to those being sold without U.S.C.'s prior written consent.
The U.S. Corrugated deal is expected to close in mid- to late April.
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