NEW YORK, Sept. 7 /CNW/ -- Aldabra 2 Acquisition Corp. (Amex: AII)
("Aldabra") today announced that it has entered into a Purchase and Sale
Agreement with Boise Cascade, L.L.C ("Boise Cascade"), a Madison Dearborn
Partners, L.L.C. ("Madison Dearborn") portfolio company, to acquire Boise
White Paper, L.L.C. (the "Paper Business"), Boise Packaging & Newsprint,
L.L.C. (the "Packaging Business") and Boise Cascade Transportation Holdings
Corp. (collectively, the "Combined Paper Businesses"). Boise Cascade will
retain 100% ownership of the Wood Products and Building Materials Distribution
At closing, Aldabra will be renamed Boise Paper Company ("BPC").
The Combined Paper Businesses, for the twelve months ended June 30, 2007
(defined as "LTM"), generated $2.28 billion in revenues and $231.7 million in
Adjusted EBITDA.(1) The Paper Business is currently the number three
manufacturer of uncoated free sheet paper in North America with LTM segment
revenues of approximately $1.54 billion. The Packaging Business is a leading
supplier of corrugated sheets, boxes, and newsprint in North America with LTM
segment revenues of approximately $784 million. Segment revenue as presented
excludes corporate segment revenue and does not give effect to inter-segment
Aldabra will acquire the Combined Paper Businesses for approximately
$1.625 billion (approximately 7.0 x LTM Adjusted EBITDA(1)), of which
approximately $1.338 billion will be paid in cash (less $38 million in cash
contributed by Boise Cascade to the Combined Paper Businesses at closing) and
the balance in shares of Aldabra common stock.(2) The sources of funds for
this transaction will consist of (i) approximately $392 million of net
proceeds from Aldabra's trust (which takes into account deferred underwriting
fees and expected interest income projected through closing, net of taxes),
(ii) approximately $946 million in a new debt facility to be raised in
conjunction with the transaction,(3) (iii) less $38 million in cash
contributed by Boise Cascade, and (iv) approximately $325 million of new
Aldabra shares that will be issued to Boise Cascade.
The number of shares of Aldabra common stock to be issued to Boise
Cascade at closing will be calculated by dividing approximately $325 million
by the average closing price per share of Aldabra common stock during the
20-day period ending three days prior to the closing of the transaction. The
parties have agreed that for purposes of this calculation, the average closing
price will not be higher than $10.00 or lower than $9.54. Assuming no
conversion rights are exercised and an average closing price of $9.77 (the
midpoint of the range), Boise Cascade would receive approximately 34.511
million shares of Aldabra common stock, representing 40.0% of BPC's shares
In connection with the transaction, Aldabra will seek to raise
approximately $946 million of debt financing to fund, in part, the cash
portion of the purchase price. This will result in net debt of $908 million
(taking into account the $38 million of cash at the Combined Paper
Businesses), resulting in a net debt/LTM Adjusted EBITDA multiple of
approximately 3.9x, assuming no exercise of conversion rights by Aldabra
shareholders. Boise Cascade will utilize a substantial portion of the cash
proceeds it receives to repay debt existing at the Boise Cascade level.
The BPC management team will be led by Alexander Toeldte, currently Boise
Cascade's executive vice president, responsible for the Combined Paper
Businesses. Prior to joining Boise Cascade in 2005, Mr. Toeldte was CEO of
two public companies in New Zealand (Fletcher Challenge Paper and Fletcher
Challenge Building). Prior to that, he was a Partner at McKinsey & Co., where
he co-headed its Global Pulp & Paper practice.
Mr. Toeldte, who will be the Chief Executive Officer of BPC, said,
"Taking the Combined Paper Businesses public through this transaction is an
important next step for our white paper and packaging operations. We believe
the segments of the paper industry that BPC will target have significant
growth opportunities. In addition, the major capital projects we have
undertaken in the last two years will increase our capacity to serve growing
market segments, such as label and release, as well as lowering costs. As a
public company with a strong balance sheet, we believe we will also have the
needed flexibility to take advantage of strategic opportunities as they
Nathan Leight and Jason Weiss, Aldabra's Chairman and CEO, respectively,
will remain Board members after the closing of the transaction. Mr. Leight
said, "We believe that this transaction meets our objective of seeking a
business combination for Aldabra on attractive terms with a company that has
significant competitive advantages and strong cash flows. This is an
important period for the paper industry, which is undergoing substantial
consolidation and rationalization. We believe the projections made by many
leading industry observers of higher prices for BPC's primary paper grades,
further validates our view." Mr. Weiss added, "We are excited to partner with
Madison Dearborn to establish a world-class public paper company and to work
with a talented management team with decades of paper industry experience."
Carl Albert, currently a member of the Board of Directors of Aldabra,
will be Chairman of the Board of Directors of BPC, post-closing.
It is expected that BPC will benefit from an asset tax basis step-up that
may have a net present value in excess of $150 million over the next ten years
relative to the tax benefit that Boise Cascade would expect to receive if the
transaction was not consummated. This calculation assumes a current tax rate
of 39%, preliminary assumptions of purchase price and purchase price
allocation that are subject to change, a discount rate of 10%, and that BPC
will have sufficient taxable income to use the resulting tax deductions.
The transaction, which has been approved by the respective Board of
Directors of Aldabra and Boise Cascade, is subject to customary closing
conditions, as well as (i) the approval of Aldabra's stockholders, (ii)
receipt of approvals under the Hart-Scott-Rodino Act, and (iii) execution of a
new debt facility by Aldabra on terms and conditions that are approved by
Aldabra's and Boise Cascade's respective Board of Directors. In addition, the
closing is conditioned on holders of fewer than 40% of the shares of Aldabra
common stock issued in its initial public offering voting against the
transaction and electing to convert those shares into cash, as permitted by
Aldabra's certificate of incorporation. The transaction is expected to close
in the 1st quarter of 2008, subject to satisfaction of the closing conditions.
As part of the transaction, Aldabra will apply to change its listing to
the New York Stock Exchange or NASDAQ.
Additional information about the transaction as well as the Combined
Paper Businesses' operations and historical financial information will be
contained in an investor presentation that will be made public and filed by
Aldabra with the Securities and Exchange Commission today.
Aldabra's investment banking advisors for this transaction are Lazard and
Pali Capital, Inc., and Kramer Levin Naftalis & Frankel LLP is acting as legal
Boise Cascade Holdings, L.L.C. is currently an SEC reporting company, and
its filings with the Securities and Exchange Commission are available at
http://www.sec.gov. Additional information on Boise Cascade may be found at
the company's website http://www.bc.com.
ABOUT THE COMBINED PAPER BUSINESSES
The Paper Business manufactures and sells uncoated free sheet (including
printer and copy paper, label and release papers, envelope and commercial
printing papers, and a wide range of value-added papers), market pulp, and
containerboard (corrugating medium). Many of its paper products are commodity
products, while others have specialized features that make these products
value added. Its value-added grades include recycled, high-bright and colored
office papers and custom-developed specialty papers for such uses as label and
release. The Paper Business sells to customers both directly from its mills
and through distribution centers. It is currently the third largest
manufacturer of uncoated free sheet in North America, with annual uncoated
free sheet production capacity of approximately 1.5 million short tons (a
short ton is equal to 2,000 pounds), accounting for approximately 11% of
uncoated free sheet papers manufactured in North America. Its pulp and paper
mills are located in Alabama, Minnesota, Oregon, and Washington. In 2006,
approximately 45% of its uncoated free sheet sales volume was sold to
OfficeMax Incorporated ("OfficeMax") under a multi-year exclusive contract
that extends through at least 2012. OfficeMax currently owns 19.9% of Boise
The Packaging Business manufactures and sells containerboard (linerboard)
and corrugated containers (cardboard boxes) and sheets, as well as newsprint.
Containerboard is used in the production of corrugated containers and sheets.
The Packaging Business' corrugated containers are used in the packaging of
fresh fruit and vegetables, processed food, beverages, and other industrial
and consumer products. Corrugated sheets are primarily sold to converters who
finish the sheets into corrugated container products. During 2006, the
Packaging Business produced approximately 554,000 short tons of linerboard and
415,000 short tons of newsprint at its mill in DeRidder, Louisiana. This mill
is one of the largest paper mills in North America, with an approximate annual
production capacity of 985,000 short tons as of December 31, 2006. In
addition to the mill in DeRidder, the Packaging Business has six converting
plants located in Idaho, Oregon, Texas, Utah, and Washington. These plants
consume containerboard equivalent to approximately 74% of the company's own
containerboard production to manufacture corrugated containers and sheets.
Between its mill in Wallula, Washington, where it has upgraded a machine
to be able to produce value-added label and release papers (in addition to
cut-size office papers), and its mill in DeRidder, Louisiana, where it is in
the process of adding a shoe press to increase containerboard production and
reduce manufacturing costs, the Combined Paper Businesses is investing almost
$110 million in extraordinary capital upgrades -- over $90 million of that
amount has already been spent. Normalized capital expenditures for the
Combined Paper Businesses are expected to be between $100 million and $125
million annually over the next five years.
Boise Paper Company is expected to have approximately 4,800 employees.
Aldabra 2 Acquisition Corp. is a special purpose acquisition corporation
that was formed to acquire an unidentified operating business. Aldabra
consummated its initial public offering on June 22, 2007, receiving gross
proceeds of $414 million through the sale of 41.4 million units of its
securities at $10.00 per unit (following the exercise of the underwriters'
over-allotment). Additional information about Aldabra 2 Acquisition Corp. may
be found at http://www.aldabracorp2.com.
Stockholders of Aldabra are urged to read the proxy statement regarding
its proposed acquisition of the Combined Paper Businesses when it becomes
available as it will contain important information regarding the transaction.
Copies of the proxy statement and other relevant documents filed by Aldabra,
which will contain information about Aldabra and the Combined Paper
Businesses, will be available when filed and without charge at the U.S.
Securities and Exchange Commission's Internet site (http://www.sec.gov).
Aldabra and its directors and executive officers may be deemed to be
participants in the solicitation of proxies in respect of the proposed
acquisition of the Combined Paper Businesses. Information regarding Aldabra's
directors and executive officers is available in its filings with the U.S.
Securities and Exchange Commission. Other information regarding the
participants in the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, will be contained in
the proxy statement to be filed with the U.S. Securities and Exchange
Commission when it becomes available.
This press release includes "forward-looking statements" within the
meaning of the safe harbor provisions of the United States Private Securities
Litigation Reform Act of 1995. Words such as "expect," "estimate," "project,"
"budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could,"
"should," "believes," "predicts," "potential," "continue," and similar
expressions are intended to identify such forward-looking statements.
Forward-looking statements in this press release include matters that involve
known and unknown risks, uncertainties and other factors that may cause actual
results, levels of activity, performance or achievements to differ materially
from results expressed or implied by this press release. Such risk factors
include, among others: costs associated with running the Combined Paper
Businesses by BPC as a stand-alone business; uncertainties as to the timing of
the acquisition and the ability to obtain financing; approval of the
transaction by Aldabra's stockholders; the satisfaction of closing conditions
to the transaction, including the receipt of regulatory approvals; and the
competitive environment in the paper industry of and competitive responses to
the proposed acquisition. Actual results may differ materially from those
contained in the forward-looking statements in this press release. Aldabra
and Boise Cascade undertake no obligation and do not intend to update these
forward-looking statements to reflect events or circumstances occurring after
the date of this press release. You are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date of this
press release. All forward-looking statements are qualified in their entirety
by this cautionary statement.
This document contains disclosures of EBITDA for certain periods, which
may be deemed to be a non-GAAP financial measure within the meaning of
Regulation G promulgated by the Securities and Exchange Commission. Aldabra's
management believes that EBITDA, or earnings before interest, taxes,
depreciation, and amortization, is an appropriate measure of evaluating
operating performance, because it reflects the resources available for
strategic opportunities including, among others investments in the business
and strategic acquisitions. The disclosure of EBITDA may not be comparable to
similarly titled measures reported by other companies. EBITDA should be
considered in addition to, and not as a substitute, or superior to, operating
income, cash flows, revenue, or other measures of financial performance
prepared in accordance with generally accepted accounting principles.
1) Adjusted EBITDA equals EBITDA (earnings before interest, taxes,
depreciation and amortization) of the Combined Paper Businesses based
upon the carve-out financial statements derived from the historical
financial statements of Boise Cascade ($231.4 million) which is then
adjusted to reflect an increase in corporate expenses of $6.3 million,
as we believe the expense required to operate BPC as a standalone
business will be approximately $18 million. Adjusted EBITDA does not
include other pro forma effects of the transaction, including the
application of purchase accounting. Adjusted EBITDA is further
adjusted to (1) add-back $4.0 million of expenses incurred with
finishing the upgrade of the Wallula, Washington mill, (2) eliminate
$1.7 million of other special items including costs associated with the
closure and sale of the Jackson sawmill, shutdown of the Vancouver and
Salem converting operations, and a gain related to changes in retiree
healthcare programs, and (3) eliminate the negative impact associated
with a contractual commitment to buy liner and medium from a third
party supplier that was in place during the LTM period. As a result of
the acquisition of Central Texas Corrugated, the packaging business
will in the future source a greater percentage of these materials
internally or through trade arrangements. Had this third party
contract, which expired in July 2007, not been in place during the LTM
period, it is estimated that EBITDA would have increased by
2) The purchase price of $1.625 billion is subject to adjustment based
upon the Combined Paper Businesses' and Aldabra's working capital at
closing, with the purchase price adjustment to be satisfied through the
issuance or redemption of shares of Aldabra common stock.
3) As part of its efforts to secure committed debt financing, the parties
will attempt to secure commitments from lenders to provide additional
debt financing in an amount equal to the aggregate amount paid in
respect of conversion rights. To the extent that Aldabra shareholders
exercise their conversion rights, the amount of the debt facility would
likely increase correspondingly.
4) Assumes the transaction closes early in the first quarter of 2008, no
Aldabra shareholders elect to exercise their conversion rights, no
adjustments to the purchase price based upon Boise working capital, a
$12 million purchase price adjustment based upon Aldabra's expected
cash balance at closing, and a primary share count of 86.261 million
shares at BPC, post closing.
For further information:
For further information: Nathan Leight, Chairman, or Jason Weiss, CEO,
+1-212-710-4100, both of Aldabra 2 Acquisition Corp. Web Site: