Boise Cascade LLC is planning to go back to the New York Stock Exchange, with an initial public offering seeking up to $200 million. The privately held wood products and building materials company based in Boise is planning to rename itself Boise Cascade Co. and be listed under the trade symbol BCC.
Boise Cascade, long identifiable by reams of paper with green and white packaging, is no longer in the paper business. The long-standing Boise company sold its building and paper solutions business in 2004 to what became OfficeMax Inc. A newly formed Boise Cascade LLC remained a private company, owned primarily by Madison Dearborn Partners, a private equity firm in Chicago. Boise Cascade sold off its paper and packaging businesses, which are operating as Boise Inc.
OfficeMax still owns a 20 percent stake in Boise Cascade. The company’s stock jumped 20 percent on Nov. 16, after Boise Cascade announced its IPO.
Steven Chercover, senior research analyst with D.A. Davidson and Co. in Portland, said the public offering may be a sign that Madison Dearborn is looking to recoup its investment.
“That’s what private equity firms do: They buy a company that’s undervalued, they improve it and ultimately they monetize it,” he said. The timing of the IPO makes sense because the housing market, which holds sway on wood products, is improving.
“Housing is now indisputably on the mend,” he said. The IPO could also raise capital that could be used to expand the company.
“If they want to grow and continue to consolidate this industry, this is something that would be necessary,” he said.
While Boise Cascade has been private since 2004, the company still reports its quarterly earnings much like a public company. The company announced on Oct. 25 that it earned $23.5 million for the third quarter of 2012. For the nine months ending Sept. 30, Boise Cascade had $40 million in net income, a large improvement from the loss of $32 million during the previous year.
John Sahlberg, a senior vice president and spokesman for the company, said Boise Cascade continued to make its earnings public because it had some publicly traded notes and wanted to keep in the habit of reporting its financial information.
Sahlberg wouldn’t comment on the company’s IPO, citing a quiet period that could last a month.
In its Nov. 15 filing to the Securities and Exchange Commission, the company doesn’t list an IPO stock price or date when the stock will be offered. The filing doesn’t list any specific uses for the capital raised, saying the company’s management will have broad discretion over the proceeds of the offering.