Boise Inc., of Boise, Idaho, and Tharco Packaging, Inc. of San Lorenzo, Ca., have announced an agreement under which Tharco will be acquired from an investor group led by Tricor Pacific Capital, Inc.
February 25, 2011
by Canadian Packaging Staff
Boise Inc., of Boise, Idaho, and Tharco Packaging, Inc. of San Lorenzo, Ca., have announced an agreement under which Tharco will be acquired from an investor group led by Tricor Pacific Capital, Inc. The US$200 million all-cash transaction will result in Tharco becoming a wholly-owned subsidiary of Boise and is expected to close in early March 2011.
Tharco offers an extensive range of corrugated products and services that complements and expands Boise’s existing packaging business. For fiscal 2010, ended September 30, 2010, Tharco had revenue of $261 million and shipped 2.3 billion square feet of corrugated products.
“This step is consistent with our strategy to profitably grow our packaging business and create value for our shareholders and customers,” says Alexander Toeldte, president and chief executive officer of Boise Inc. “Acquiring Tharco achieves several important goals: it expands our presence in packaging markets, which are growing long term, and is a good geographical fit, extending our reach from the Pacific Northwest to California, Colorado, Arizona, and Georgia. It is consistent with our goal to increase our containerboard integration with our downstream corrugated converting operations, increasing our integration to over 85 per cent from approximately 70 per cent today. This reduces our exposure to export markets and enhances margins.
“When complete, we expect annualized synergies of approximately $8-million, achieved primarily through the increased integration,” explains Toeldte. “We anticipate these synergies will be fully realized in 18 months. The acquisition will be financed using cash on hand and existing revolver capacity, with no material change to our leverage profile. We expect the transaction to be accretive to our earnings in the first year.”
Other benefits of the transaction include opportunities to profitably grow in adjacent packaging businesses, including stock boxes and multi-material engineered packaging solutions.
“Tharco’s established business and brands are well respected, profitable, and fit well with our existing businesses,” states Toeldte. “Tharco has an experienced management team, dedicated and engaged employees, and a proven track record.”
Bo Fears, chief executive officer of Tharco adds: “Boise meets all the criteria we would want in a parent company. We are pleased to join a successful, forward-thinking, and growing public company that is committed to the packaging industry.”
Headquartered in Boise, Idaho, Boise Inc. manufactures packaging products and papers including corrugated containers, containerboard, label and release and flexible packaging papers, imaging papers for the office and home, printing and converting papers, newsprint, and market pulp.
For more information, visit www.BoiseInc.com.
Tharco Packaging, Inc. is a leading manufacturer and distributor of packaging solutions with an extensive offering of products and services, including a broad range of stock products and customized packaging solutions such as a stock box program with over 1,600 SKUs of standard size boxes for same-day pick-up or next-day delivery; customized packaging such as traditional and plastic corrugated, foam packaging, and anti-static products; combined corrugated and foam packaging for superior product protection; and an experienced staff of packaging designers with expertise in graphic, structural, and cushion packaging engineering.
Tricor Pacific Capital, Inc. is a leading private equity investment firm that invests in profitable, well-managed, middle-market companies. Tricor, with offices in Vancouver, and Lake Forest, IL, acquired Tharco in 2005.
For more information, please contact Brad Seaman in Tricor’s Lake Forest office at 847-295-4410.