International Paper, which is headquartered in Memphis, Ten., announced Thursday that it plans to sell its Temple-Inland Building Products Division, which includes four facilities in Diboll, to Georgia-Pacific LLC for $750 million, "subject to certain pre- and post-closing agreements."
The assets that Georgia-Pacific will be acquiring in the purchase include 16 manufacturing facilities, five solid wood mills, four particle board plants, two medium-density fiber board plants, one fiber board plant, and four gypsum wall board plants in the southeastern and southern parts of the United States. Locally, that number includes Temple-Inland's particle board and fiber board plants in Diboll, along with Diboll Lumber and the division's headquarters.
David Kellam, the vice president and general manager of IP's Temple-Inland Building Products said because Georgia-Pacific is considered to be one of Temple-Inland's competitors, the sale is going to have to be approved by the US Justice Department's Antitrust Division.
"The closing is subject to the regulatory antitrust review process can take a while," Kellam said. "The deal will probably close in the first quarter of next year. No decision on the division's people or facilities can be made while Georgia-Pacific and Temple-Inland's Building Products Division are still considered competitors.
The division employs about 1,900 people, with about 550 of those employees based in the Diboll area.
"We've got great folks here, and despite the depressed housing market, we've been in the top quarter of the industry during the worst four years of the housing industry," Kellam said. "Over the years, we've received great support from the community and East Texas."
Buddy Temple, the great-grandson of T.L.L. Temple and the son of Arthur Temple Jr., said even though his family no longer has any ownership in Temple-Inland, the news of International Paper's decision to sell the Temple-Inland Building Products Division was not welcome.
"This is a very sad day for a lot of folks that have been affiliated with Temple Industries or Temple-Inland over the years," Temple said. "My father is probably turning somersaults in his grave right now because he absolutely hated Georgia-Pacific."
Temple said his main concern is for the Building Products Division's employees. He added that International Paper has been "wonderful" to Temple-Inland employees in the year or so since IP bought the company.
"Hopefully, they'll keep more of the Temple-Inland employees than we're expecting them to," Temple said. "We had hoped that it would be someone other than Georgia-Pacific."
In a press release, John Faraci, International Paper's chairman and chief executive officer, said although Temple-Inland Building Products is not central to IP's market strategy, the division "is an industry leader."
"I am pleased to have reached a deal that recognizes the strength of the business and provides excellent value for IP shareowners," Faraci said.
According to a story that appeared on the Reuters Web site, IP has been planning to sell Temple-Inland's Building Products Division since it bought its smaller rival, Temple-Inland back in February 2012.
"This acquisition is a long-term investment that will create value for our customers and our company," Jim Hannan, Georgia-Pacific's chief executive officer and president, said in a press release. "These high-quality assets will teams of talented employees are strategically located large, growing regions of building products customers and will well into our existing operations. This will allow us to expand our geographic footprint and enhance our service to new and existing customers."
According to a press release, the Atlanta-based Georgia-Pacific manufactures and markets building products, tissue, packaging, paper, cellulose, and related chemicals. The company employees nearly 35,000 people worldwide.
When International Paper bought out Temple-Inland in February 2012 for $3.7 billion, the move came about after IP reached an agreement with the US Justice Department's Antitrust Division, according to the Associated Press. The deal also included Temple-Inland's existing $600 million in debt.
The settlement called for International Paper to sell three container board mills within four months of the deal's closing. The plants there were set to be sold were Temple-Inland's mills in Ontario, Calif. and New Johnsonville, Tenn., along with IP's Hueneme, Calif. facility.
As it was originally proposed, the new company would have controlled about 37 percent of North America's container board capacity, according to the Justice Department. Corrugated boxes constructed from container board are used to ship more than 90 percent of all goods nationwide. According to a statement from the Justice Department, the original deal would have "substantially lessened competition in the production and sale of container board."
Temple-Inland's Board of Directors voted unanimously to reject an unsolicited buy-out offer from International Paper in July 2011. At that time, IP offered to buy all of Temple-Inland's outstanding shares for the price of $30.60 a share. The board determined that the offer grossly under-valued Temple-Inland and was not in the best interest of the company's stockholders.
T.L.L. Temple founded the Southern Pine Lumber Company in 1903. His grandson, Arthur Temple Jr. became the executive vice president and general manager of the company in 1948. After his efforts to modernize the company, it became known as Temple Industries in 1963, according to an entry on the Texas State Historical Association's Web site. Time Inc. purchased the company in 1973, and it spun off on its own as Temple-Inland in 1984.
"We'll just have to sit back and see what happens," Temple said. "At this point, all we can do is hope for the best."
Thursday, May 23 2013 3:47 PM EDT2013-05-23 19:47:31 GMT
During a motion hearing Thursday, Judge Campbell Cox denied a request to lower the bail for the former Nacogdoches Independent School District substitute teacher who was indicted on five felony chargesMore >>
During a motion hearing Thursday, Judge Campbell Cox denied a request to lower the bail for the former Nacogdoches Independent School District substitute teacher who was indicted on five felony charges in connection to his alleged sexual misconduct with NISD high school students.More >>
Thursday, May 23 2013 11:52 AM EDT2013-05-23 15:52:35 GMT
The oldest excuse in the book did not work for a Nacogdoches woman behind on her child support Wednesday, according to Nacogdoches County authorities.According to the report, a deputy arrived on the 11,000More >>
The oldest excuse in the book did not work for a Nacogdoches woman behind on her child support Wednesday, according to Nacogdoches County authorities.More >>
Thursday, May 23 2013 10:23 AM EDT2013-05-23 14:23:54 GMT
DPS has released an official report in connection to the death of a Lufkin man who was hit and killed after getting hit by a vehicle while walking on US 59 in the Diboll area Wednesday night.AccordingMore >>
DPS has released an official report in connection to the death of a Lufkin man who was hit and killed after getting hit by a vehicle while walking on US 59 in the Diboll area Wednesday night.More >>
Thursday, May 23 2013 1:04 AM EDT2013-05-23 05:04:21 GMT
A Huntington couple lost their cars, jobs, and children after a 10 year drug addiction. They are now thankful for the drug free life they are living. Jason and Donna Holtzclaw have survived their backMore >>
A Huntington couple lost their cars, jobs, and children after a 10 year drug addiction. They are now thankful for the drug free life they are living. More >>
Thursday, May 23 2013 1:01 AM EDT2013-05-23 05:01:01 GMT
A man was struck and killed by a vehicle on Highway 59, south of Diboll.The accident happened around 9 p.m. Tuesday. Diboll Police and the Department of Public Safety responded to scene.According to DPSMore >>
A man was struck and killed by a vehicle on Highway 59, south of Diboll.More >>