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Boise Cascade plans public stock offering


Firm will not disclose purpose of funds, ready for growth


By MATEUSZ PERKOWSKI


Capital Press


A major timber buyer plans to raise up to $200 million by selling shares to the public as the company regains profitability.


Boise Cascade, a wood products manufacturer based in Boise, Idaho, recently filed preliminary documents for the initial public offering of stock with the U.S. Securities and Exchange Commission.


The company is tight-lipped about the intended use of the proceeds, saying only that the funds will be spent on "general corporate purposes, but we have not allocated the proceeds for any specific purpose at this time."


However, Boise Cascade said it's in a strong position for growth as the housing market rebounds due to major upgrades to its facilities, even through the severe economic downturn.


Sales of the company's products plunged as demand for building materials evaporated. Boise Cascade's revenues dropped from $5.4 billion in 2007 to $3 billion in 2008 and $2 billion in 2009.


After posting a profit of nearly $128 million in 2007, the company's losses ranged from $33 million to $98 million over the next four years, according to the SEC filing.


Boise Cascade is on track for a profitable year in 2012, earning $40 million during the first three quarters.


Despite the financial setbacks, the company said it has been able to increase its market share in engineered wood products used in residential and light commercial construction, as well as industrial applications.


Between 2005 and 2011, Boise Cascade invested $270 million on facility upgrades, but the spending did not benefit all of its plants equally. The company noted that it cut workers and closed several mills in Oregon while installing state-of-the-art equipment at its plywood facility in Medford, Ore.


Most of the company's 18 manufacturing plants are clustered in the Northwest, but it also has 31 distribution facilities spread throughout the U.S.


While building materials distribution represents the majority of its sales, most of its earnings -- before tax, interest and other accounting measures -- derive from wood products.


According to the recent filing, the company has nearly $220 million in total debt and more than $1 billion in assets.


Boise Cascade is ultimately owned by Madison Dearborn, a private equity investment fund, which will continue to control a majority stake in the company after the initial public offering, according to the SEC filing.


The company hasn't yet specified the number of shares it plans to offer, or the expected price per share.



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