Another of Jackson County’s largest employers is being sold to a private equity investment firm.

Idaho-based Boise Cascade Corp. announced Monday it will sell its paper, forest products and timberland holdings for about $3.7 billion to a company formed by Madison Dearborn Partners LLC of Chicago. Publicly traded Boise has five plants and 950 employees in Medford and White City.

Mail-order gift giant Bear Creek Corp. was acquired by New York investment firm Wasserstein & Co. in April. Just as that acquisition altered little in day-to-day operations, Boise’s operations will likely continue with little change, a Boise spokesman said.

Wasserstein’s history, however, is to resell companies after several years, while Madison Dearborn, known as MDP, often retains holdings for a long period. In the case of the Boise purchase, MDP has formed a new privately held company, Boise Cascade LLC, with headquarters in Boise. Its chief executive officer will be W. Thomas Stephens, former chief and president of Canadian timber operator MacMillan Bloedel Ltd., which was acquired by Weyerhaeuser Co. in 1999.

Boise Cascade Corp., founded in 1957, will leave the wood-products business and take on the name of OfficeMax Inc., the office-supply company it purchased in December for $1.3 billion.

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Boise Cascade said the sale completes its strategic alternatives review, which it announced in July 2003.

"The transaction we are announcing today will complete Boise’s transformation, begun in the mid-1990s, from a predominantly manufacturing-based company to a world-scale distribution company," Chairman and Chief Executive George J. Harad said in a written statement.

"By separating the company into two ongoing entities, we will successfully establish Boise Office Solutions, soon to be OfficeMax, as a strong independent company in the office-products distribution business and place our paper and forest products assets in the hands of a management team that seeks to focus on those businesses."

Boise spokesman Ralph Poore said the company was courted by several companies after making known its strategic study last summer.

"We’ve been talking with MDP for several months," Poore said.

Bob Smith, who oversees Western Oregon operations for Boise, said the good thing about the pending sale is that the Boise Building Solutions unit will remain intact.

"With them buying all the manufacturing facilities and paper plants, it keeps the lines of business together," Smith said.

Employees learned of the sale on Monday.

It’s too early to know what, if any, compensation and policy changes employees can expect.

"Certainly there are some unknowns and people are concerned about that kind of thing," Poore said. "MDP indicated it would offer similar compensation packages to what employees have now. It’s a private company and it may want to do things differently. There are a lot of regulations and expenses associated with public companies that a private company doesn’t have."

MDP’s basic industries holdings include a dozen energy and power, paper, packaging and forest products, chemicals, building products, metals and mining, and general manufacturingcompanies. Among them are Buckeye Cellulose Corp., a producer of specialty cellulose pulps, in Memphis, Tenn., and Jefferson Smurfit Group of Dublin, Ireland.

The company’s Web site notes basic industries properties often represent attractive investment opportunities because competition is limited by the difficulty in obtaining raw materials, operational costs and environmental and permitting restrictions.

Boise Cascade expects to close the sale by mid-November. Following the asset sale and name change, the company will trade on the New York Stock Exchange under the ticker symbol OMX, OfficeMax’s ticker symbol until December.

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.

How Boise Cascade Corp. has evolved