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Boise to Acquire Tharco Packaging

Boise, Idaho, and San Lorenzo, California, USA, 22 February 2011 -- Boise Inc. (NYSE: BZ) and Tharco Packaging, Inc., today announced that their respective boards of directors have approved an agreement under which Tharco will be acquired from an investor group led by Tricor Pacific Capital, Inc. The USD 200 million all-cash transaction will result in Tharco becoming a wholly-owned subsidiary of Boise and is expected to close in early March 2011.

Tharco offers an extensive range of corrugated products and services that complements and expands Boise's existing packaging business. For fiscal 2010, ended 30 September 2010, Tharco had revenue of USD 261 million and shipped 2.3 billion square feet of corrugated products.

"This step is consistent with our strategy to profitably grow our packaging business and create value for our shareholders and customers," said Alexander Toeldte, president and chief executive officer of Boise Inc. "Acquiring Tharco achieves several important goals: it expands our presence in packaging markets, which are growing long term, and is a good geographical fit, extending our reach from the Pacific Northwest to California, Colorado, Arizona, and Georgia. It is consistent with our goal to increase our containerboard integration with our downstream corrugated converting operations to over 85% from approximately 70% today. This reduces our exposure to export markets and enhances margins," he said.

"When complete, we expect annualized synergies of approximately USD 8 million, achieved primarily through the increased integration," Toeldte said. "We anticipate these synergies will be fully realized in 18 months. The acquisition will be financed using cash on hand and existing revolver capacity, with no material change to our leverage profile. We expect the transaction to be accretive to our earnings in the first year."

Other benefits of the transaction include opportunities to profitably grow in adjacent packaging businesses, including stock boxes and multimaterial engineered packaging solutions. "Tharco's established business and brands are well respected, profitable, and fit well with our existing businesses," said Toeldte. "Tharco has an experienced management team, dedicated and engaged employees, and a proven track record."

Tharco has approximately 900 employees at 11 manufacturing and distribution facilities across the country.

To access a webcast and conference call concerning the acquisition of Tharco, go to www.BoiseInc.com and click on the link to the webcast under Webcasts & Presentations on the Investors drop-down menu. A replay of the conference call will be available in Webcasts & Presentations through 22 March. Playback numbers are 800-642-1687 for U.S. callers and 706-645-9291 for international callers. The passcode is 44479819.

Headquartered in Boise, Idaho, Boise Inc. (NYSE: BZ) manufactures packaging products and papers including corrugated containers, containerboard, label and release and flexible packaging papers, imaging papers for the office and home, printing and converting papers, newsprint, and market pulp. For additional information, visit www.BoiseInc.com.

Tharco Packaging, Inc. is a leading manufacturer and distributor of packaging solutions, with an extensive offering of products and services, including a broad range of stock products and customized packaging solutions such as a stock box program with over 1600 SKUs of standard size boxes for same-day pick-up or next-day delivery; customized packaging such as traditional and plastic corrugated, foam  packaging, and antistatic products; combined corrugated and foam packaging for superior product protection; and an experienced staff of packaging designers with expertise in graphic, structural, and cushion packaging engineering.

Tricor Pacific Capital, Inc. is a leading private equity investment firm that invests in profitable, wellmanaged, middle-market companies. Tricor, with offices in Vancouver, British Columbia, Canada, and Lake Forest, Illinois, USA, acquired Tharco in 2005.


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