MEMPHIS, Tenn., July 1, 2014 /PRNewswire/ -- International Paper (NYSE: IP) today announced the completion of the previously announced spinoff of its distribution solutions business, xpedx, and xpedx's merger with Unisource, with the combined companies now operating as Veritiv Corporation ("Veritiv").
The spinoff was accomplished by the contribution of the xpedx business to Veritiv and the distribution of 8,160,000 shares of Veritiv common stock on a pro-rata basis to International Paper shareholders. In exchange for such contribution, International Paper today received a special payment of $400 million, subject to certain adjustments, financed with new debt in Veritiv's capital structure. Immediately following the distribution, UWW Holdings, Inc., the parent company of Unisource Worldwide, Inc., merged with and into Veritiv, with the parent company of UWW Holdings, Inc. receiving 7,840,000 unregistered shares of Veritiv common stock (equal to approximately 49% of the total resulting outstanding shares of Veritiv common stock) as merger consideration. Veritiv is expected to begin "regular way" trading on the New York Stock Exchange tomorrow under the symbol VRTV, CUSIP number 923454 102.
"The completion of this transaction and creation of Veritiv provide excellent value for International Paper shareholders, as this new independent public company emerges with opportunities to be stronger and more competitive than either of the merged companies alone," said International Paper Chairman and CEO John Faraci.
The definitive distribution ratio increased slightly due to certain repurchases by IP of its common stock after the record date. Shares of International Paper common stock outstanding as of 5:00 p.m. (EDT) on the June 20, 2014 record date for the distribution (other than shares repurchased by IP) received 0.019118445 shares of Veritiv common stock for each share of International Paper common stock. International Paper shareholders did not receive fractional shares of Veritiv common stock. Instead, fractional shares of Veritiv common stock will be aggregated and sold in the open market, with the net proceeds to be distributed pro rata in cash payments to the International Paper shareholders who would otherwise receive a fractional share of Veritiv common stock.
The receipt of Veritiv common stock in the distribution is tax-free to International Paper shareholders for U.S. federal income tax purposes, except for the gain or loss attributable to cash received in lieu of fractional shares of Veritiv common stock. International Paper shareholders are urged to consult with their tax advisors with respect to the U.S. state and local or foreign tax consequences, as applicable, of the spin-off.
About International Paper
International Paper (NYSE: IP) is a global leader in packaging and paper with manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Its businesses include industrial and consumer packaging and uncoated papers. Headquartered in Memphis, Tenn., the company employs approximately 65,000 people and is strategically located in more than 24 countries serving customers worldwide. International Paper net sales for 2013 were $29 billion. For more information about International Paper, its products and stewardship efforts, visit internationalpaper.com.
Certain statements in this press release regarding the spinoff transaction may be considered "forward-looking statements," such as statements relating to expectations for the new company. These statements may also be identified by words such as "intend," "expect," "anticipate," "will," "implied," "designed," "assume" and similar expressions. These statements reflect the current views of International Paper's management and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these statements. Factors which could cause actual results to differ include but are not limited to: (i) industry conditions, including but not limited to changes in the cost or availability of raw materials, energy and transportation costs, competition the companies face, cyclicality and changes in consumer preferences, demand and pricing for the companies' products; (ii) global economic conditions and political changes; and (iii) other factors that can be found in International Paper's press releases and filings with the Securities and Exchange Commission and Veritiv's filing with the Securities and Exchange Commission. International Paper undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
A registration statement relating to Veritiv common stock has been filed with the Securities and Exchange Commission. This release does not constitute an offer to sell or the solicitation of an offer to buy any securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. A prospectus related to these securities can be obtained by contacting International Paper at International Paper Company, Attn: Investor Relations, 6400 Poplar Ave., Memphis, TN 38197, Tel: (901) 419-4352, or by accessing the Securities and Exchange Commission's website at www.sec.gov.
SOURCE International Paper