LA GRANDE - Boise Cascade LLC has agreed to sell 330,000 of its Northeast Region timberlands to a Boston investment firm. A total of 2.2 million acres will change hands across the United States.
The deal will affect timberlands in Wallowa, Union, Baker and Umatilla counties and as far as Waitsburg in southeast Washington. The sale was finalized Dec. 21.
Forest Capital Partners LLC of Boston will pay $1.65 billion in cash for forestlands the Pacific Northwest, Louisiana, Alabama and Minnesota.
Boise Cascade will retain all of its sawmill operations.
Ralph Poore, a Boise Cascade spokesman, said the company completed the deal as part of a long-term strategy to reduce its debt and allow it to focus on its paper, wood products and distribution businesses.
As part of the transaction, Boise Cascade will enter into agreements with Forest Capital that will ensure a continued supply of wood fiber to its processing and manufacturing plants.
The open market agreements will also give Forest Products a reliable customer for its wood products.
"We buy wood in the open market now," Poore said, indicating that the practice was not new for Boise Cascade.
"We don't know the details yet. That will happen over the next several weeks," said Bruce Cartmel, La Grande manager of Boise Cascade's Northeast Region.
Cartmel said the majority of the 35 people working in forestry for Boise Cascade will be affected. The company will no longer manage timberlands.
The foresters may be hired by the new owners, but that's up to Forest Capital, Cartmel said.
He said meetings have not been set for negotiations. He expected these to start in early January.
Boise Cascade will continue to operate Boise Building Solutions manufacturing and distribution and Boise Paper Solutions manufacturing facilities. All of these operations are headquartered in Boise, Idaho.
Recreational use of Boise Cascade timberlands, including hunting and hiking, has long been available to local residents. According to Poore, the company allowed similar practises in its other holdings.
How this is to continue in the Northeast region, Poore said, will be up to Forest Capital.
Boise Cascade LLC purchased forestlands and wood products operations from the original Boise Cascade corporation also headquartered in Boise, Idaho. The $3.7 billion purchase was announced in July 2004. It divested the original company of its forest products, paper and timberland assets.
Boise Cascade LLC, a company newly formed by the Chicago investment firm, Madison Dearborn Partners, took over Boise operations in the La Grande, Island City and Elgin mills this November.
The original Boise Cascade assumed the name of Office Max, a Cleveland-based office products company it had purchased in 2003 for $1.2 million.
Forest Capital is an independent investment firm that acquires and manages investment-grade forestlands. Information about the company is available on the company's Web site, www. Forestcap.com.