MEMPHIS, TENN—Distribution companies Xpedx and Unisource Worldwide have agreed to a merger process expected to complete in mid-2014, forming a new publicly traded company.

The agreement was signed off by Xpedx's parent company International Paper, and UWW Holdings, the holding company that owns Unisource and in turn is owned by several affiliates including Georgia-Pacific and an affiliate of Bain Capital.

The new company will have projected annual revenue of $9 billion to $10 billion. Its staff will be comprised of about 9,500 employees across more than 170 distribution centres in North America. Reports last year following the companies' letter of intent said that the merger would create the largest distributor of office and copier paper in North America. 

International Paper will receive a cash payment of $400 million and will distribute shares of the new company to existing shareholders. Approximately 51% of the new company's shares will be owned by International Paper shareholders and UWW Holdings will own 49%.

Xpedx president Mary Laschinger will become chair and chief executive officer. Allan Dragone, Unisource chief executive officer, will transition to the role of director. The company's executive offices will be housed in the greater Atlanta area, and the two existing legacy headquarters will be maintained in Loveland, OH, and Norcross, GA.

"We're bringing together two well established distribution businesses to create a new company with the financial stability and strategic focus to strengthen and grow our core businesses," said Laschinger in a statement.

Unisource Worldwide distributes more than 150,000 products, including commercial printing and business imaging papers, equipment, supplies and packaging materials. Unisouce Canada, a subsidiary of Unisource Worldwide, runs 18 locations across the country. Xpedx is a business to business distributor of packaging, facility and printing supplies in North America. It closed its Canadian operations in 2011.