Georgia-Pacific completes purchase of Temple-Inland - KTRE.com | Lufkin and Nacogdoches, Texas

Georgia-Pacific completes purchase of Temple-Inland

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DIBOLL, TX (KTRE) -

Earlier today, Georgia-Pacific received clearance from the Department of Justice to complete its $710 million purchase of Temple-Inland Building Products from International Paper. Georgia-Pacific started the process in December 2012.

Temple-Inland has roots in Deep East Texas. T.L.L. When T.L.L Temple founded the company in 1903, it was known as the Southern Pine Lumber Company.

"With the sale final, we are eager to combine our assets into one building products business," said Mark Luetters, executive vice president – building products. "Temple-Inland brings high-quality assets with teams of talented employees, and we look forward to combining best practices so that we will continue to improve our ability to serve key customers. We highly value our employees and the communities where we operate, and we are committed to a smooth transition."

The acquisition includes 15 U.S. facilities with more than 1,800 employees across eight states, including Alabama, Arkansas, Georgia, Louisiana, Oklahoma, Pennsylvania, Tennessee and Texas. Five hundred-fifty of those employees are based in the Diboll area. Teams at these facilities manufacture the following building products: fiberboard, gypsum products, lumber, medium density fiberboard (MDF) and particleboard.

"Now that the sale is complete, we look forward to combining our assets and people into one building products business," Karen Cole, a spokesperson for Georgia-Pacific, said in an e-mailed statement. "We believe the more than 1,800 talented employees who are joining Georgia-Pacific bring diverse ideas, experiences and expertise that will help us continue to grow our business. While there may be some overlap in work assignments, it's too early to know how we will merge our teams."

Diboll Mayor John McClain said that he is optimistic the purchase will have little impact on the community.

"I'm hopeful that they will continue to run the operating facilities and hopefully continue to maintain the office building here," McClain said.

McClain said Temple-Inland employees are currently going through the application process to make their jobs with the new company official.

"They've set up for today and tomorrow for the plants, and the office building is, to my understanding, where they are changing over to their payroll."

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.

"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," David Kellam, the vice president and general manager of IP's Temple-Inland Building Products, said in a previous story. "Over the years, we've received great support from the community and East Texas."

According to a press release, Georgia-Pacific, which is headquartered in Atlanta, Georgia, is one of the world's leading manufacturers and marketers of building products, tissue, packaging, paper, cellulose and related chemicals. The company employs approximately 35,000 people worldwide. For more information, visit

When Georgia-Pacific announced its plans to buy out Temple-Inland Building Products, 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 had been planning to sell Temple-Inland's Building Products Division since it bought its smaller rival, Temple-Inland back in February 2012.

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.

Jonathan Gerland, the executive director of the History Center in Diboll said what set Temple-Inland apart over the years was the company's loyalty to the community.

"There was more of a commitment to stay here, many companies came and went, bought the timber, cut the timber, manufactured lumber, and then moved on to other places, Gerland said.

For the City of Diboll, the Temple name has left a lasting legacy in the community, and residents are welcoming the purchase with open arms.

"We're hoping they'll be a part of the community, just like the Temples were, and I-P has been good in just what short time they've been here," said John Pouland, a retired Temple-Inland employee who owns a business in Diboll.

However, despite the cautious optimism, the future of Temple-Inland's Diboll facilities is still uncertain.

"It's their decision, and we'll just have to see," McClain said.

Copyright 2013 KTRE. All rights reserved.

 

 

 

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