Cellulose-based specialty products maker Buckeye Technologies, Inc. (BKI) agreed Wednesday to be acquired by privately-held pulp and paper company Georgia-Pacific LLC for $37.50 per share in an all-cash deal valued at about $1.5 billion, including debt. The deal has the unanimous approval of both companies' boards of directors.
"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 nonwovens businesses of Buckeye Technologies will provide a significant platform for continued growth and success," Georgia-Pacific President and CEO Jim Hannan said in a statement.
The offer price represents a 25.3 percent premium over Buckeye Technologies' closing price of $29.93 on Tuesday. The closure of the deal remains primarily subject to the tendering of at least 75 percent of the outstanding shares of Buckeye Technologies' common stock to the offer.
Buckeye Technologies is currently trading at $37.51, up $7.58 or 25.34% on a volume of 5.19 million shares, thus matching the offer price.
The deal is not conditioned on financing. Meanwhile, the companies have agreed to complete the deal through a merger in certain circumstances, subject to receipt of stockholder approval.
For Memphis, Tennessee-based Buckeye Technologies, Barclays is serving as exclusive financial adviser and Dechert LLP is serving as legal adviser. Meanwhile, UBS and Blackstone are serving as financial advisers to Georgia-Pacific.
"We are pleased that Georgia-Pacific recognizes the significant value of our company's special and unique assets, talented employees, and research and development capabilities. Georgia-Pacific's acquisition of Buckeye will provide our company and our employees with exciting future growth opportunities," Buckeye Chairman and CEO John Crowe noted.
Founded in 1927 as a wholesaler of hardwood lumber, Atlanta-based Georgia-Pacific has grown through expansion and acquisitions to become one of the world's leading manufacturers and marketers of tissue, pulp, paper, packaging, building products and related chemicals.
Georgia-Pacific was previously listed on the NYSE from 1949 through 2005, when it was acquired as a wholly-owned subsidiary of Wichita, Kansas-based Koch Industries, Inc., a privately owned company.
Georgia-Pacific had earlier in mid-December 2012 agreed to acquire Temple-Inland building products unit from paper and packaging company International Paper Co. (IP) for $750 million in cash.
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