ACCO-MeadWestvaco merger financing to include $270 million notes

By Paul A. Harris and Sara Rosenberg

Portland, Ore., Jan. 4 - ACCO Brands Corp. plans to use proceeds from the sale of $270 million of senior notes to help fund its merger with MeadWestvaco, according to a market source.

The bonds, in addition to an $845 million credit facility, are being led by Barclays Capital Inc., Bank of America Merrill Lynch and BMO Capital Markets Corp.

Proceeds from ACCO's credit facility will be used to fund its merger MeadWestvaco's office supplies business, repay ACCO's 10 5/8% senior secured notes and for working capital.

Under the agreement, MeadWestvaco will establish a separate entity to hold the consumer & office products business, the shares of which will be distributed to MeadWestvaco shareholders in a tax-free transaction in return for a $460 million dividend. Immediately after the spin-off and distribution, the newly formed company will merge with ACCO.

The merger is valued at roughly $860 million, and at completion, MeadWestvaco shareholders will own 50.5% of the combined company.

Closing on the transaction is expected in the first half of this year, subject to approval by ACCO shareholders and the satisfaction of customary closing conditions and regulatory approvals, including a ruling from the U.S. Internal Revenue Service on the tax-free nature of the transaction.

ACCO is a Lincolnshire, Ill.-based office supply manufacturer.

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