Global packaging and paper company International Paper (IP) has announced that the company is in talks with Unisource regarding a proposed business merger of its distribution business xpedx, and Unisource.
Both xpedx and Unisource are business-to-business distributors of printing, packaging and facility supplies.
The discussions were initiated between the companies when Unisource approached IP about a possible merger and the parties entered into a non-binding letter of intent (LoI) to explore a possible deal.
The LoI outlines a 'Reverse Morris Trust' transaction in which IP will contribute the xpedx assets to a newly-formed company and receive a cash dividend financed with debt in the capital structure of the new company.
According to IP, the new company would be spun off to the shareholders of IP and immediately merged with Unisource. The parties have agreed to negotiate with each other for a period of time until an agreement can be reached or the parties terminate the LoI.
No assurances can be made that the parties will reach agreement on a mutually acceptable transaction or that it will be on the terms outlined in the LoI, if completed.
xpedx will continue to operate as a division of IP, if no agreement on the transaction can be reached.
