Jan. 28 (Bloomberg) -- International Paper Co., the world’s largest maker of cardboard shipping containers, agreed to merge its Xpedx distribution business with closely held Unisource Worldwide Inc. and spin off the new company.
The deal will be done in the form of a so-called Reverse Morris Trust structure in which International Paper will contribute the Xpedx assets, the Memphis, Tennessee-based company said today in a statement. It will get $400 million in cash as part of the transaction and generate cost savings of about $200 million, the company said.
Following the tax-free spinoff, International Paper shareholders will own 51 percent of the new company which will trade on the New York Stock Exchange, be based in Atlanta and have annual sales of as much as $10 billion. International Paper said three banks agreed to provide $1.4 billion in asset-backed financing for the deal.
International Paper first disclosed that it was in talks about such a transaction in April. Unisource is owned by private-equity firm Bain Capital LLC and paper producer Georgia-Pacific LLC. Unisource distributes and markets more than 150,000 printing products, according to its website.
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