International Paper To Merge Its Xpedx Distribution Business With Unisource

(RTTNews) - International Paper (IP) announced its distribution solutions businesses xpedx and Unisource Worldwide, Inc. will merge, resulting in the creation of a new publicly traded company. International Paper will indirectly contribute the assets of xpedx to a newly formed wholly owned subsidiary, xpedx Holding Company, in exchange for the stock of the subsidiary, a cash payment of approximately $400 million expected to be financed with new debt in the new company's capital structure, as well as the potential for an additional cash payment pursuant to an earn-out provision. In the sixth year following closing, International Paper will have the right to receive a one-time payment of up to $100 million in cash as an earn-out.

Following the merger, approximately 51 percent of the shares of the new public company will be owned by International Paper shareholders, with the remaining approximately 49 percent of shares held by UWW Holdings.

The new company intends to apply to list its shares for trading on the New York Stock Exchange. 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.

Mary Laschinger will be the chief executive officer 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.