Company news: Buyout firm to pay $1.6 billion for Boise Cascade units
Boise Cascade LLC is selling its paper, packaging and newsprint division for about $1.63 billion to a company formed in February by private equity investors.
Aldabra 2 Acquisition Corp., started by investors Nathan Leight and Jason Weiss of New York-based Terrapin Partners, agreed to pay $1.34 billion in cash and the rest in shares to take over the unit.
Aldabra, which is listed on the American Stock Exchange, said it would change its name after the deal to Boise Paper Co. and seek a listing on either the New York Stock Exchange or Nasdaq Stock Market.
It will be run by Alexander Toeldte, currently Boise Cascade’s executive vice president in charge of the paper, packaging and newsprint businesses.
Private equity investor Madison Dearborn Partners, based in Chicago, has owned Boise Cascade since 2004 when it was split from retailer OfficeMax Inc. Private equity firms often buy troubled companies, make changes and cuts and then sell them for huge gains.
Madison Dearborn, whose chairman, John Canning, is leading an investor group that hopes to buy the Chicago Cubs from Tribune Co., is now shedding divisions of Boise Cascade two years after the investment company failed in its bid to sell shares of the wood products company due to a lack of interest.
“Struggling lender Countrywide Financial Corp. said Friday it will cut as many as 12,000 jobs as it struggles to deal with challenging conditions in the mortgage industry.
The company said the cuts, amounting to as much as 20 percent of its work force, are needed because it expects new mortgages to fall about 25 percent in 2008 from this year’s levels.
The job cuts are expected to center primarily on the company’s production divisions and its general and administrative support areas, Countrywide Chief Executive Angelo Mozilo said in a letter distributed to employees Friday.
He also called the current market cycle “the most severe in the contemporary history of our industry.”
“During the past two years the growth in home price appreciation has stopped dead in its tracks and in many areas of the country it has turned in the wrong direction,” Mozilo said in the letter.
In recent weeks, the company borrowed $11.5 billion and sold a $2 billion stake to Bank of America so it could keep operating its retail banking and mortgage lending businesses.
The Calabasas-based company said it intends to keep transferring its residential lending business into its Countrywide Bank unit as a way to strengthen its access to funding.