International Paper to sell Temple-Inland Building Products Division for $750 million
International Paper (IP), a global paper and packaging company with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa, has reached an agreement to sell its Temple-Inland Building Products division to Georgia-Pacific, LLC for $750 million in cash, subject to certain pre- and post-closing adjustments. The assets to be sold include 16 manufacturing facilities – 5 solid wood mills, 4 particleboard plants, 2 medium-density fiberboard plants, 1 fiberboard plant and 4 gypsum wallboard plants.
Temple-Inland Building Products facilities are located across 8 states, primarily in the southeastern and eastern portions of the United States, with access to 5 of the top 12 housing markets.
The transaction is expected to be completed in the first quarter of 2013, subject to satisfaction of various closing conditions, including obtaining required governmental approvals. IP intends to use the proceeds from the sale to reduce its debt.
Additionally, the company announced its intention to report a new adjusted EPS measure, ‘Operating Earnings’ beginning with the fourth quarter 2012 earnings release. Operating earnings is defined as earnings from continuing operations excluding special items and non-operating pension expense, which is impacted by changes in interest rates and plan returns. Significant declines in interest rates over the past several years have caused an extraordinary increase in certain components of pension expense that the company considers to be unrelated to underlying operating performance.
This move will thereby reduce the volatility in earnings from non-operational factors and improve the transparency of the performance of current operations. For the 9-month period ended September 30, 2012, non-operating pension expense was approximately $.18 per share on a continuing operations basis. The company will provide further information concerning the new reporting format with their next quarterly earnings release.