xpedx, Unisource Merger Moves Forward
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To finance the cash payment to International Paper and refinance existing debt of Unisource, the new company has entered into a commitment with three banks for $1.4 billion of asset-backed financing. The new company's target debt-to-EBITDA ratio is expected to be in the range of 4-5.
In the sixth year following closing, International Paper will have the right to receive a one-time payment of up to $100 million in cash as an "earn-out." The earn-out amount will be calculated based upon the extent to which actual EBITDA of the new company in the third, fourth and fifth years following the closing exceed an agreed-upon target.
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