International Paper in talks to spin off distribution business:
International Paper Co is in talks with Bain Capital-backed Unisource Worldwide Inc to spin off and merge its distribution business with the privately held company as it focuses on its packaging business.
The unit, xpedx, distributes printing and packaging supplies in North America and accounted for about 22 percent of International Paper's $27.83 billion revenue last year. Xpedx's assets will be first divested into a newly formed corporation and International Paper will receive a cash dividend financed with debt raised by the new company. The newly formed corporation will then be spun off to International Paper shareholders and immediately thereafter merged with Unisource. The deal -- structured as a 'Reverse Morris Trust' transaction -- will be tax-free to International Paper and its shareholders, the company said. Terms of ownership in the merged company and the amount of dividend have not been decided.
