US: Boise buys OfficeMax; may exit forest products

PPI, Aug 2003

Boise has agreed to buy third-ranked US office supplies retailer OfficeMax in a deal valued at $1.154 billion.

The company also announced that it would undertake a "strategic review" of its main paper and forest products businesses in 2004 and early 2005 once the OfficeMax deal closes. "Boise may choose to exit some or all of these businesses," according to analyst Chip Dillon of Citigroup Smith Barney. He said the company is "least married" to the building products, timber land, and the DeRidder, La., linerboard and newsprint mill.

Although Boise may see some synergies in running the company's four uncoated woodfree mills with the office products business, Dillon believes that long-term the company will realize the most value by "exiting the paper and forest products business entirely."