Georgia-Pacific to acquire Buckeye Technologies for $1.5 bn
24 Apr 2013
Georgia-Pacific, an American pulp and paper company, yesterday struck a deal to buy specialty fibre maker Buckeye Technologies Inc, for nearly $1.5 billion in cash.
Georgia-Pacific, owned by Koch Industries, will pay $37.50 per share, a 25 per cent premium to Buckeye's Tuesday closing price of $29.93 on the New York Stock Exchange.
Memphis, Tennessee-based Buckeye was established in the early 1900's as the Buckeye Cottonseed Oil Company, a cottonseed crushing division of Procter and Gamble.
Its chemical cellulose is used in the manufacture of diverse products such as food casings, rayon industrial cord, acetate fibers and plastics, as well as thickeners for personal care products, food and pharmaceuticals, while its customised fibers are used to manufacture automotive air and oil filters, premium letter head, currency paper, and personal stationery.
Its fluff pulp is used in products such as disposable diapers, feminine hygiene products and incontinence products. Our non-woven materials are used in feminine hygiene products, wipes, tabletop items, food pads, incontinence and household cleaning products.
Buckeye operates 6 manufacturing plants in the US and Germany and has annual sales of nearly $1 billion.
Headquartered in Atlanta, Georgia-Pacific is one of the world's leading manufacturers and marketers of building products, tissue, packaging, paper, cellulose and related chemicals.
The company employs nearly 35,000 people worldwide.
"This transaction enables our stockholders to realise significant value, while also representing an important next step in the growth of Buckeye Technologies," said John Crowe, chairman and CEO of Buckeye Technologies.
"Buckeye Technologies' competitive assets and capabilities strongly complement Georgia-Pacific's existing cellulose business and products.
The talented employees, innovation capabilities, advanced technologies, and specialty fibers and non-wovens businesses of Buckeye Technologies will provide a significant platform for continued growth and success," said Jim Hannan, CEO and president, Georgia-Pacific.
Privately-held Koch Industries operates in a wide range of industries, including refining, chemicals and biofuels, forest and consumer products, fertilisers, polymers and fibers, process and pollution control equipment and technologies, commodity trading and services, minerals, ranching, and investments.
The company has invested about $50 billion in acquisitions and other capital expenditures since 2003 and has a presence in nearly 60 countries with about 60,000 people employed across the world.