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G-P Selling Unisource Stake

October 2002
NEW YORK—Georgia-Pacific announced that it is selling a controlling, 60 percent stake in its Unisource Worldwide paper distribution subsidiary to Bain Capital, a global private investment firm.

Georgia-Pacific expects the transaction to result in roughly $850 million after-tax proceeds. Georgia-Pacific will retain 40 percent ownership of Unisource and will provide $170 million in seller financing. Net proceeds of the transaction will be used by Georgia-Pacific to reduce debt.

As part of the transaction, which is expected to close during the fourth quarter of 2002, Georgia-Pacific will enter into a sale-leaseback agreement with third parties for certain real estate assets now owned by Unisource. These assets will be sub-leased to Unisource. This sale-leaseback agreement will generate approximately $150 million of the expected $850 million in after-tax proceeds to Georgia-Pacific.

Georgia-Pacific's 40 percent interest will be held by CP&P Inc., the company's subsidiary formed to hold its consumer products, packaging, and pulp and paper businesses.

"After thorough review and consideration of our alternatives, our decision to sell a controlling interest in Unisource is based on two strategic factors," says A.D. "Pete" Correll, chairman and CEO, Georgia-Pacific. "First, the value of the original synergies in the combination of Unisource and our uncoated paper manufacturing business was realized in our sale last year of the majority of those assets to Domtar Inc. And, second, since that divestiture, Unisource would have limited strategic fit with either our consumer products and packaging businesses or our building products and distribution businesses once separation of our company occurs."
 

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