IP Buys Mead's Zellerbach Business, Combines with its Xpedx Operation
International Paper Co. has reached a definitive agreement to purchase Mead Corp.'s Zellerbach distribution operations at a price of $263 million. Zellerbach will be combined with IP's existing Xpedx business, and the resulting distribution organization will operate under the Xpedx banner. The agreement is expected to be completed within a month.
Combining of the two businesses creates an $8.5-billion operation with 330 distribution centers and some 240 retail and wholesales outlets and nearly 10,000 employees. Thomas Costello, IP's senior vice president of distribution and Xpedx president, will head the new business.
Zellerbach (Miamisburg, OH) distributes printing, packaging, and industrial supplies and equipment, with some 30 primary distribution centers and 40 stores serving smaller printing shops in the U.S. It has a current employee force of around 2000, with annual sales of more than $1.5 billion. Xpedx (Covington, KY) is a major distributor of printing, packaging, industrial, and graphic arts supplies, with more than 300 distribution locations and 200 stores in 45 states, Mexico and Europe. It has about 7,500 employees, although this number will likely be reduced, with annual sales approaching $5 billion.
John T. Dillion, chairman and CEO of IP, noted that the acquisition of Zellerbach provides Xpedx with a more diverse product portfolio and should result is considerable facility and personnel costs. Jerome Tartar, chairman and CEO of Mead, said that Zellerbach would have a stronger future as an Xpedx partner. Her added that Mead would continue to focus on its core businesses, which include coated and uncoated printing and writing papers, specialty papers, packaging boards, and school-office products.
IP (Purchase, NY), is in its 100th year of operation. The company is a major global producer of printing and writing papers and packaging board grades, with operations in 31 countries and a global employee force of more than 80,000.
Edited by Ken L. Patrick