Georgia Pacific to Buy Buckeye Tech in $1.5B Deal
NEW YORK (TheDeal) -- Georgia-Pacific LLC said Wednesday it plans to acquire Buckeye Technologies Inc. (BKI) in a $1.5 billion cash-and-debt deal aimed at moving the paper products company into new specialty fiber markets.
Terms of the deal call for Georgia-Pacific, a unit of privately-held Koch Industries Inc., to pay $37.50 per share in cash for Memphis-based Buckeye, a premium of 25% over the target's Tuesday close. The price values Buckeye's shares outstanding at about $1.4 billion, with Atlanta-based Georgia-Pacific also taking on some debt in the transaction.
Buckeye was falling 0.5% to $37.66 at mid-day. The shares have gained 18% in the past 12 months. DA Davidson analyst Steven Chercover cut his rating in Buckeye to "underperform" from "buy."
Georgia-Pacific said that it expects to launch a cash tender offer for Buckeye shares, with the deal subject to both regulatory approval and participation of at least 75% of Buckeye shares in the tender.Buckeye is a maker of fibers and nonwoven materials made from wood and cotton. The company's manufacturing assets include mills in Florida, Tennessee, North Carolina and Germany, and it employs more than 1,200 people from offices in the U.S., Europe and China. The deal is the second significant purchase for Georgia-Pacific in recent months, following the company's December announcement that it would buy the building products division of Temple-Inland from International Paper Co. for $750 million. The company is a unit of privately held Koch Industries Inc., which acquired Georgia-Pacific Corp. for $21 billion in 2006. Georgia-Pacific CEO Jim Hannan in a statement said Buckeye's products "strongly complement Georgia-Pacific's existing cellulose business and products" and should help spark growth. "The talented employees, innovation capabilities, advanced technologies, and specialty fibers and nonwovens businesses of Buckeye Technologies will provide a significant platform for continued growth and success," Hannan said.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV