Norcross-based Unisource Worldwide, which signaled last April that it was in merger talks with Xpedx, a complimentary office and copier paper distribution business owned by International Paper, announced a deal Tuesday.
After the merger is completed later this year, International Paper will own 51 percent of the new company, will be based in the Atlanta area, Unisource said.
The combined company, which will be publicly traded, will have about 9,500 employees and more than 170 distribution centers in North America, the companies said. The company, which has not been named, will have projected annual revenue of $9 billion to $10 billion.
Mary Laschinger, currently president of Xpedx, will be chairman and chief executive officer of the new company. Allan Dragone, currently president and CEO of Unisource, will serve as a director.
“By bringing together these two businesses, we will be able to provide customers with innovative solutions and ideas to solve their toughest challenges in product packaging and fulfillment, paper and print management, supply chain and logistics services, and facility solutions,” Seth Meisel, a Unisource director and a managing director at Bain Capital, said in announcing the merger.
Unisource distributes office paper, janitorial supplies and other goods to commercial customers. Xpedx distributes printing paper, packaging and related supplies to businesses.
Unisource was once majority owned by Georgia-Pacific, which sold a majority stake to Boston-based Bain Capital in 1999.
The merger agreement is between International Paper and UWW Holdings, Unisource’s holding company. UWW is owned indirectly by affiliates of Bain Capital and Georgia-Pacific.
The creation of the new company will occur in several stages. International Paper will contribute Xpedx’s assets to a newly formed subsidiary, to be called Xpedx Holding Co. in exchange for the subsidiary’s stock and $400 million in cash, financed by debt issued by Xpedx.
Xpedx Holding will then be spun off as a new company, and it will merge first with UWW and then with Unisource. International Paper will own 51 percent of shares of the new public company and the remaining 49 percent stake will be owned by UWW Holding.
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