Boise Cascade has more than a trickle of building materials. The company is North America's #2 manufacturer of laminated wood, I-joists, and plywood. Other wood products include lumber and particle board. Boise Cascade is also one of the largest building materials distributors, offering its own and third-party products from about 50 locations across the US. Customers include lumberyards, home improvement centers, and industrial converters (makers of windows, doors, and other assembled products) in North America and China. Boise Cascade was formed in 2004 along with parent Boise Cascade Holdings (BCH), which decided to spin it off to the public in 2012.
The company plans to use its anticipated $200 million in IPO proceeds for general corporate purposes. Parent BCH was formed by Madison Dearborn Partners in 2004 when the investment firm bought the old Boise Cascade Corporation. That company's office products distribution business became a separate entity that changed its name to OfficeMax.
Change in Company Type
In conjunction with the IPO, the company will convert from a limited liability company to a corporation and change its name from Boise Cascade LLC to Boise Cascade Company.
Boise Cascade has about 20 wood manufacturing facilities, mostly in the Pacific Northwest. Its 30 building materials distribution locations are scattered throughout the US. The building materials distribution unit brings in the most sales, but wood products contribute the most to earnings before interest, taxes, depreciation, and amortization (EBITDA).
Since the company's fortunes are closely tied to the US housing market, it has had a rough few years. After posting a net loss of about $98 million in 2009, Boise Cascade has been slowly recovering. It cut the losses in half by 2011 on the strength of improving sales due to modest increases in housing starts.
Boise Cascade intends to be ready for a recovery in the housing market. Its plans include growing its wood products segment by focusing on its laminated veneer lumber and I-joists, together called engineered wood products (EWP). The company has expanded its production capabilities and established relationships with third-party veneer suppliers.
Boise Cascade will also expand its building materials distribution segment by adding centers in adjacent areas using storage facilities or longer trucking routes. It will also acquire new facilities and add new products based on customer demand.
Pre-IPO, OfficeMax owns about 20% of BCH; management and Madison Dearborn Partners own the rest. After the public offering, BCH will gradual sell its holding to the public over time. – less