Exhibit 12(c)(3)
Confidential
Project Roundup
Background Materials
March 9, 2000
1
Orange Summary Statistics
Summary Statistics
Price per Share $16.50
Basic Minority Shares Outstanding (millions)(a) 12.4
Total Consideration (excluding impact of options and transaction costs) $204.8
Premium
-------
Unaffected Price(a) $10.63 55%
Average Price Last 180 days(a) $10.86 52%
Price on March 3,2000(a) $14.88 11%
Price on March 8,2000 $15.63 6%
Amount Multiple
------ --------
2000 EPS(a) $1.21 13.7x
2001 EPS(e) $1.55 10.6
LTM EBITDA(a) $210.2 6.8
2
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(a) Source: Orange management (January 11, 2000).
(b) Price 30 days prior to initial offer of $13.25/share on December 1, 1999.
(c) Calendar days prior to initial offer on December 1, 1999.
(d) Price 1 day prior to second offer of $16.50/share on March 6, 2000.
(e) Source: Orange management (December 15, 1999).
(f) Actual performance through December 31, 1999.
3
[A line graph entitled "Orange Monthly Common Stock Price History" is depicted.
The legend shows a solid line representing the stock price of Boise Cascade
Office Products Corporation. The line graph shows a beginning point between $10
and $15, rising to a peak between $40 and $45 in roughly the beginning of the
second quarter of 1996, with a sharp decline thereafter, followed by a series of
ups and downs, ending at roughly the $15 mark.]
4
[A line graph entitled "Orange vs. Composites: Monthly Indexed Common Stock
Price History" is depicted. The legend shows one solid line representing
Composite 1 (consisting of Staples, Office Max and Office Depot) with a starting
point at 100, rising to a peak just above 350 at roughly the start of the second
quarter of 1996, dipping sharply to 150 by the end of the third quarter of 1996
followed by several ups and downs, leading generally upward to around 300 by the
last quarter of 1998. The line then drops sharply in mid-199 to 200, ending
roughly at 240. A second solid line representing Orange (Boise Cascade Office
Products) begins at 100 and gradually moves up and down, rising to a high of
roughly 160 around the third quarter of 1997, followed by ups and downs, with a
general downward trend to a low of around 75 in the third quarter of 1998. The
line then moves up and down up to a closing point of 125. The third solid line
representing Composite 2 (US Office Products and Corporate Express) begins at
100 and moves upward to a peak of about 225 at the beginning of the second
quarter of 1996, followed by a decline to around 80 at the close of the first
quarter of 1997. The line then moves up to a second peak of around 160 at the
end of the third quarter of 1997, followed by ups and downs with general
downward trend to a closing point of 25.]
5
[A line graph entitled "Orange Twelve-Month Moving Forward P/E Multiples"" is
depicted. The vertical axis is labeled "Price / Next 12 Months EPS" and is
numbered, bottom to top, from 5 to 40 in increments of 5. The legend shows one
solid line representing Orange (Boise Cascade Office Products) which starts at
24 and moves up and down to a peak of around 37 at roughly the second quarter of
1996, followed by a sharp drop by the beginning of the third quarter of 1996.
The line moves up and down thereafter, in a general downward trend to a closing
point of roughly 10.]
6
[Four bar graphs are depicted under the general title "Shares Traded at Specific
Prices: Orange"
The first bar graph, appearing in the upper left corner of the field is entitled
"2 Years." The vertical axis is labeled "Volume (000)" and is numbered from 0 to
4,000, in increments of 500. The horizontal axis is labeled "Daily from
11/30/1997 to 11/30/1999" and is numbered from "7.00 to 7.99" to "20.00 to
22.00," in increments of 1.00. The bars show a pattern of ups and downs from a
starting point of roughly 700, rising to a peak of 3,500 at 10.00, followed by a
retreat to a pattern of ups and downs with a downward pattern after the 15.00
point. To the lower right of the bar graph, the following language appears:
"Weighted Average Price: 13.30." Directly below that language appears the
following: "Total Shares Traded as Percent of Shares Outstanding: 34.4%."
The second bar graph, appearing in the upper right corner of the field is
entitled "6 Months." The vertical axis is labeled "Volume (000)" and is numbered
from 0 to 800, in increments of 100. The horizontal axis is labeled "Daily from
5/31/1999 to 11/30/1999" and is numbered from "9.50 to 9.69" to "12.30 to
13.50," in increments of 0.40. The bars here show a pattern of an increase from
a starting point of 100 at 9.50-9.69 to a peak of around 590 at 10.10, followed
by a dip to 300 at 10.30 and then a spike to 700 at 10.50. After the peak at
10.50, there is a marked decline to ups and downs that average 100 to a close at
200. To the lower right of the bar graph, the following language appears:
"Weighted Average Price: 10.79." Directly below that language appears the
following: "Total Shares Traded as Percent of Shares Outstanding: 5.2%."
The third bar graph, appearing in the lower left corner of the field is entitled
"3 Months." The vertical axis is labeled "Volume (000)" and is numbered from 0
to 500, in increments of 100. The horizontal axis is labeled "Daily from
8/31/1999 to 11/30/1999" and is numbered from "9.50 to 9.69" to "11.70 to
12.90," in increments of 0.20. The bars show a pattern of heavy volume between
9.50-10.10 with a starting point at 100, a peak of 400 at 10.10, falling off to
an average of 100 from 10.30 to 10.90. The ups and downs of the bars from
11.10-11.70 and average less than 50. To the lower right of the bar graph, the
following language appears: "Weighted Average Price: 10.29." Directly below that
language appears the following: "Total Shares Traded as Percent of Shares
Outstanding: 2.4%."
The fourth bar graph, appearing in the lower right corner of the field is
entitled "Since Initial Announcement 12/01/99." The vertical axis is labeled
"Volume (000)" and is numbered from 0 to 1,400, in increments of 200. The
horizontal axis is labeled "Daily from 12/1/1999 to 11/30/1999" and is numbered
from "14.50 to 14.59" to "15.60 to 16.70," in increments of 0.10. The bars go up
and down from the starting point of roughly 300 at 14.50 rising to peaks of
around 1,200 at 14.60, 14.80 and 15.20. After 15.20, the bars fall off to an
average of 100 from 15.30 to 15.60. To the lower right of the bar graph, the
following language appears: "Weighted Average Price: 14.97." Directly below that
language appears the following: "Total Shares Traded as Percent of Shares
Outstanding: 9.8%."]
7
Orange
Summary of Selected Research Analyst Estimates
EPS Estimates
Investment Bank Analyst 2000 2001
Goldman Sachs M. Fassler $1.25 N.A.
Brown Brothers D. Binder $1.36 $1.62
J.P.Morgan D. Fox $1.25 $1.36
Midwest Research J. Stinson $1.25 N.A.
William Blair C. McDonald $1.20 N.A.
Median IBES Estimates $1.25 $1.49
Orange Management Estimates $1.21 $1.55
Source: IBES (March 8, 2000) and Orange management (December 15, 1999).
8
Comparison of Selected Public Office Products Companies
($ in millions, except per share data)
As of March 8, 2000
Levered LTM Multiples Levered EBITDA P/E(b)
Multiples(a)
% of 52 Equity Levered
Company Price Week Market Market Cap. Sales EBITDA EBIT 2000E 2001E 2000E 2001E
High Cap.
Business Direct
Orange $15.63 100.0% $1,028 $1,370 0.4x 6.5x 9.2x 5.7x 5.2x 12.5x 10.5x
Buhrmann NV(c)(d) $24.89 89.7% $2,400 $4,741 0.6x 12.2x 18.1x 8.0x 7.1x 14.4x 12.2x
US Office Products 2.25 39.1 83 1,211 0.5 18.4 N.M. N.A. N.A. N.M. N.A.
Retail
Office Depot $10.69 41.6% $3,518 $3,871 0.4x 5.7x 9.5x 4.7x 4.2x 9.7x 8.3x
Officemax 6.31 52.6 790 840 0.2 4.2 7.6 3.3 3.6 10.5 9.2
Staples 19.13 53.5 8,883 9,284 1.0 13.1 17.4 12.2 7.0 22.2 16.3
- --------------------------------------------------------------------------------
(a) EBITDA projections based on Goldman Sachs Equity Research.
(b) Based on IBES median estimates.
(c) Assumes CEXP results consolidated pro forma as of 1/1/99. EBITDA
projections based on Dresdner Kleinwort Benson Research (2/11/00).
(d) Exchange rate of 1 Euro = $0.957 as of 03/08/00 used for conversion of
Buhrmann financials.
9
Orange
Discounted Cash Flow Analysis - - Management Forecast
US$ millions except per share data
As of January 1, 2000
Financial Sensitivity
Equity Value per Share (a)
----------------------------------------------------------
Discount EBITDA Exit Multiple
rate ----------------------------------------------
4.5x 5.0x 5.5x 6.0x 6.5x
10.0% $14.04 $15.83 $17.61 $19.40 $21.19
12.0% $12.50 $14.13 $15.76 $17.39 $19.03
14.0% $11.10 $12.60 $14.09 $15.59 $17.08
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Operating Sensitivity
Equity Value per Share (a) (b)
----------------------------------------------------------
Change in Change in Sales Growth
Operating -----------------------------------------------
Margin (5.0)% (2.5)% 0.0% 2.5% 5.0%
(1.0)% $9.63 $10.58 $11.62 $12.74 $13.96
(0.5)% $11.34 $12.46 $13.69 $15.02 $16.47
0.0% $13.04 $14.34 $15.76 $17.30 $18.97
0.5% $14.75 $16.22 $17.83 $19.58 $21.48
1.0% $16.45 $18.11 $19.91 $21.86 $23.99
(a) Based on $341.5 million of net debt as of 12/31/99
(b) To illustrate sensitivities of per share values and based on 5.5x EBITDA
exit multiple in 2004 and a 12.0% discount rate
10
Selected Transactions in the U.S. Contract Stationery Industry
LTM Levered Multiples
Aggregate
Date Change of Consideration
Effective Acquiror Target Control ($ million) Sales EBITDA EBIT
10/1999 Buhrmann NV Corporate Express Yes $2,292 0.6x 9.5x 13.2x
04/1999 Clayton, Dubilier & Rice Inc. US Office Products Co.(a) See (a) 51(b) 0.6 8.8 13.7
09/1998 Koninklijke KNP BT NV BT Office Products (remaining No 138 0.3 6.2 10.2
30% stake)
06/1998 Clayton, Dubilier & Rice Inc. US Office Products Co. (25% No 270 0.7 9.9 13.5
stake)(b)
Post-Synergy Multiple
Announced
Date Annual
Effective Acquiror Target Synergies EBITDA EBIT
10/1999 Buhrmann NV Corporate Express $100.0 6.7x 8.4x
04/1999 Clayton, Dubilier & Rice Inc. US Office Products Co.(a) - - -
09/1998 Koninklijke KNP BT NV BT Office Products (remaining - - -
30% stake)
06/1998 Clayton, Dubilier & Rice Inc. US Office Products Co. (25% - - -
stake)(b)
Information based on Securities Data Corporation and publicly available data.
(a) Clayton, Dubilier & Rice invested an additional $51 mm in US Office
Products. Assumes 48.1% ownership and 52.8mm fully diluted shares. LTM
multiples based on $1,202 in net debt.
(b) Clayton, Dubilier & Rice invested $270mm for a 25% interest in US Office
Products as well as warrants for an additional 25% of the company. LTM
multiples based on an assumed value of $65mm for warrants, $250mm equity
stake, and $1,156 in net debt.
11
[A bar graph entitled "Comparison of Select Minority Buyouts: Premium of Final
Price vs. Stock Price Four Weeks Prior to Announcement" is depicted. The
vertical axis is labeled "Frequency" and is numbered, bottom to top, from 0 to
14 in increments of 2. The horizontal axis is labeled "% Premium" and is marked,
left to right, "-10 to 0," "0 to 15," "15 to 30," "30 to 45," "45 to 60," "60 to
75" and "75 to 80." The bars rise from a starting point of 2 at -10 to 0, rising
to a peak of 12 on 15 to 30, falling to 6 and 7 and 30 to 45 and 45 to 60,
respectively, followed by a drop off to 2 and less thereafter. To the far left
of the graph appears the following language: "Mean Bid: 31.0%." Immediately
below that language appears the following: "Median Bid: 28.8%." The source
appears at the bottom of the page as "Securities Data Corporation, 3/8/2000."]
12