OfficeMax (OMX) Will Get $129M Gross Followng Boise Cascade (BCC) IPO

February 12, 2013 6:35 AM EST Send to a Friend
OfficeMax, Inc. (NYSE: OMX) will receive approximately $129 million in cash proceeds on February 12, 2013 related to its October 2004 investment in Boise Cascade Holdings, L.L.C. ("BCH") (NYSE: BCC). Since 2004, OfficeMax has held two classes of securities in BCH, non-voting equity securities ("Series A Units") and voting equity securities.

BCH will redeem all of the Series A Units held by OfficeMax for $112 million, equal to the original investment amount of $66 million plus $46 million of total accrued dividends. As previously disclosed, OfficeMax had been recording income earned from the 8% annual dividend yield on the Series A Units as a reduction of operating, selling and general and administrative expenses in its Corporate & Other segment. This dividend income will cease upon completion of the redemption of the Series A Units on February 12, 2013.

Following the redemption of the Series A Units and the distribution on the Series B Units, BCH will continue to hold approximately $28 million of cash and own 29,700,000 common shares of Boise Cascade Company, which completed its initial public stock offering today.

OfficeMax also continues to hold a 20.4% ownership interest in the Series B Units of BCH, which do not accrue any dividend. OfficeMax has accounted for the Series B Units under the cost method as a $109 million investment on its consolidated balance sheet since October 2004. BCH has declared a distribution of approximately $85 million payable on February 12, 2013 to the holders of its Series B Units, of which OfficeMax's share of proceeds is approximately $17 million. This distribution on the Series B Units will be recognized as income by OfficeMax and will not reduce the $109 million investment amount.


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