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Boise Cascade Agrees to Buy OfficeMax
CLEVELAND (AP) -- Boise Cascade Corp., a wood and paper products maker, has agreed to acquire OfficeMax Inc. for nearly $1.2 billion in cash and stock in a deal that would more than double the size of its office products distribution business.

OfficeMax is the third biggest U.S. office products retailer, behind Office Depot and Staples.

Under the deal announced Monday, Boise Cascade will pay $9 a share for OfficeMax, a 25 percent premium over OfficeMax's closing price of $7.18 a share on Friday.

Boise Cascade plans to pay 30 percent of the price in cash and 70 percent in stock, the companies said in a statement. The cash amount could increase if the value of Boise Cascade shares drop.

The deal has already been unanimously approved by both companies' boards of directors and is subject to customary approvals under antitrust laws and by the shareholders of OfficeMax and Boise.

"This business combination gives the newly formulated organization the ability to better serve all channels of the office products market from home offices to small businesses to large corporations," Michael Feuer, OfficeMax's co-founder, chairman and chief executive officer, said in a statement. "Together, OfficeMax with Boise will be strategically and financially stronger and rival the size of its closest competitors.

About half of Idaho-based Boise Cascade's $7.4 billion in revenues comes from selling office products. Buying OfficeMax would allow it to better compete with Staples, the largest office retailer, and Office Depot, the second largest chain in the category.

Boise has been shedding jobs to cut costs and lost $27.5 million or 53 cents a share in the first quarter. Boise's stock has fallen 7 percent this year while shares of OfficeMax have gained 44 percent.

The companies hope to complete the deal by the end of the year.

Cleveland-based OfficeMax sells through nearly 1,000 superstores and via direct mail catalogs and the Internet. It had sales of $4.8 billion in 2002.

Boise Cascade, based in Boise, Idaho, had sales of $7.4 billion in 2002. Its office products distribution unit, based in Itasca, Ill., had $3.5 billion in sales last year.