International Paper Company · NYSE:IP
International Paper — International Paper Co /New/ — Merger or Acquisition (September 2011)
17 slides from International Paper's merger presentation, Sep 6, 2011
Slide 1: Acquisition of Temple Inland
Acquisition of Temple Inland September 2011 Acquisition of Temple Inland September 2011 Exhibit 99.1
Slide 2: Additional Information
Additional Information In connection with the proposed merger, Temple-Inland will file a proxy statement with the Securities and Exchange Commission (the “SEC”). Investors and security holders are advised to read the proxy statement when it becomes available because it will contain important informa
Slide 3: Statements Relating to Non-GAAP Financial Measures
Statements Relating to Non-GAAP Financial Measures Statements Relating to Non-GAAP Financial Measures During the course of this presentation, certain non-U.S. GAAP financial information will be presented. A reconciliation of those numbers to U.S. GAAP financial measures is available on the company’s
Slide 4: Transaction Overview
Transaction Overview Transaction Overview International Paper has agreed to acquire Temple- Inland, the third-largest North American corrugated packaging manufacturer Purchase price of $32.00/share Total purchase consideration of $4.3 Billion, including Temple-Inland net debt of $600 Million as of 1
Slide 5: Compelling Strategic Acquisition
Compelling Strategic Acquisition Consistent with IP’s focus on paper & packaging and achieving and sustaining cost of capital returns Makes a good N.A. corrugated packaging business an excellent one - Compelling strategic and industrial logic - Shared focus on low-cost mills; complementary convertin
Slide 6: Temple-Inland at a Glance: Predominately a Corrugated Packaging Company
Temple-Inland at a Glance Predominately a Corrugated Packaging Company 2011 Sales (1) of $4.0 Billion 2011 EBITDA (1) of $446 Million 4 Million Tons of Containerboard Capacity 7 Containerboard Mills 59 Box Plants 14 Building Products Plants 2010 Segment Assets Temple-Inland at a Glance Predominately
Slide 7: Transaction Highlights
Transaction Highlights Transaction Highlights Consideration $32.00 per TIN share, all cash Synergies $300 Million of annual run-rate synergies, to be achieved within 24 months of close Timing Expected close in the first calendar quarter of 2012, subject to shareholder vote and regulatory and other c
Slide 8: Purchase Price Overview
Purchase Price Overview Purchase Price Overview Purchase Price $4.3B EBITDA (1) Multiple 7.4x Synergies at Full Run Rate $300M EBITDA (1) Multiple (with Synergies) 4.9x (1) I/B/E/S First Call FY12 filtered mean as of 9/2/2011
Slide 9: Financing Overview
Financing Overview Financing Overview Financing Cash $1.5B Debt Rollover ~ $0.6B New Debt ~ $2.2B • Committed financing • Rapid repayment of debt • Debt / EBITDA ~3.0x
Slide 10: Strengthening International Paper: Combination Strongly Cash Accretive
Strengthening International Paper Combination Strongly Cash Accretive Strengthening International Paper Combination Strongly Cash Accretive IP FY11 (1) TIN FY11 (1) IP + TIN w/Run Rate Synergies Sales ($ Billion) $26.6 $4.0 $30.6 EBITDA ($ Billion) $3.75 $0.45 $4.50 (3) EBITDA Margin 14.1% 11.3% 14.
Slide 11: Strategic Rationale: Strengthening Our Packaging Business
Strategic Rationale Strengthening Our Packaging Business Strategic Rationale Strengthening Our Packaging Business IP North American Industrial Packaging (1) TIN Packaging Business (1) Run Rate Synergies IP NA PKG + TIN w/ Run Rate Synergies 2011 Sales ($ Billion) $8.7 $3.3 $12.0 2011 EBITDA ($ Billi
Slide 12: External Environment: Timing is right
External Environment Timing is right External Environment Timing is right U.S. Box Demand flat – feels like 0-1% GDP growth U.S. Box Demand not expected to return to pre- crisis levels until 2015 Global Containerboard markets are strong and expected to continue to grow
Slide 13: 2011 - Demand Still Recovering
2011 - Demand Still Recovering RISI Fcst. 2011 - Demand Still Recovering Source: Fibre Box Association 2011 1H Run Rate 2011-2015 2.2% CAGR (RISI) U.S. Box Shipments
Slide 14: Significant Targeted Synergies: $300 Million Run Rate
Significant Targeted Synergies $300 Million Run Rate Significant Targeted Synergies $300 Million Run Rate S G & A Eliminate Duplication IT Integration Mills Grade / Machine Mix Optimization Efficiency Improvements Supply Chain Logistics Optimization Purchasing Consolidation Box Plants System Streaml
Slide 15: Acquisition Assessment
Acquisition Assessment Acquisition Assessment Creates Shareholder Value Consistent with Strategy Improves Core Business Cost of Capital Returns Significant Synergies Greater Cash Flow Generation Low Integration Risk Bogalusa & Guaranty Due Diligence
Slide 16: Path Forward
Path Forward Path Forward Attain Regulatory Approval Obtain Temple-Inland Shareholder Approval Develop IP’s Internal Integration Plan Remain Focused on Day to Day Business Operations
Slide 17: Acquisition Summary
Acquisition Summary Acquisition Summary Consistent with strategy Financially attractive - Accretive in year one - Returns exceed cost of capital Strengthens IP’s portfolio Makes a good Industrial Packaging business an excellent one Significant synergy opportunities Creates shareholder value
International Paper Co /New/ — Merger or Acquisition (September 2011) on 6ix