Georgia-Pacific, the U.S. paper and pulp producer controlled by the Koch brothers, agreed to buy Buckeye Technologies for about $1.45 billion to add cellulose products output.
Closely held Georgia-Pacific will pay $37.50 a share, the companies said in a statement Wednesday. That's 25 percent more than Memphis, Tenn.-based Buckeye's closing price Tuesday.
Buckeye makes specialty fibers and materials from wood and cotton that are used in everything from oil filters to nail polish. It has plants in Florida, Tennessee, North Carolina and Germany. Established in the 1900s as a cottonseed crushing division of Procter & Gamble Co., the company was bought out by management and Madison Dear
born Partners in 1993 and had an initial public offering in 1995, according to its website.
"Buckeye Technologies' competitive assets and capabilities strongly complement Georgia-Pacific's existing cellulose business and products," Jim Hannan, chief executive officer of Atlanta-based Georgia-Pacific, said in the statement.
The acquisition is the largest since Georgia-Pacific was acquired by Koch Industries in 2005, according to data compiled by Bloomberg. Georgia-Pacific agreed to pay $750 million to buy International Paper's Temple Inland Building Products division in December.
Brothers David Koch and Charles Koch are executives and owners of Wichita, Kansas-based Koch Industries. Their holdings in the company make them the world's sixth- and seventh-richest men, with an estimated wealth of $45.6 billion each, according to the Bloomberg Billionaires Index.
The acquisition is subject to antitrust approval and requires that 75 percent of Buckeye's holders tender their shares. Georgia-Pacific is entitled to a $48.6 million breakup fee if Buckeye accepts a superior bid.
NewSouth Capital Management, a Memphis-based investment company, is the largest shareholder in Buckeye, according to data compiled by Bloomberg.