Clearwater Paper selling tissue business for $1.06 billion
Spokane-based Clearwater Paper Corp., a tissue and paperboard supplier which operates a major plant in Lewiston, announced Monday that it is selling its tissue business to Sofidel America Corporation for $1.06 billion.
Sodifel is a subsidiary of Sofidel S.p.A., which manufactures paper for hygienic and domestic use, according to a news release sent by Clearwater. The $1.06 billion deal is subject to adjustments for debt, cash, transaction expenses and net working capital.
The sale follows the $700 million purchase in February of Georgia-based paperboard manufacturer Graphic Packaging. As part of the deal, Clearwater Paper, which has 14 manufacturing facilities, took over that companies bleached paperboard factory in August, Georgia, earlier this year.
The company said the sale of the tissue business to Sofidel takes the company a further step into becoming “a premier independent supplier of paperboard” to North America.
“We are pleased to have reached this agreement with Sofidel, which we believe positions Clearwater Paper for its next chapter of growth and value creation,” Arsen Kitch, president and chief executive officer, said in the news release. “We look forward to delivering innovative and sustainable products to our converter customers while generating strong returns for our shareholders.”
Upon completion of this transaction, we intend to deleverage our balance sheet while scaling and diversifying our paperboard business to meet the needs of our customers.
Kitch said the deal to sell its tissue business to Sofidel will help the company to diversify its paperboard business.
“Our tissue business has delivered excellent financial and operational performance, supported by outstanding service,” he continued. “We believe this business needs scale and investment to drive growth over the longer term, and we are excited to watch its continued progress as part of Sofidel.
“We appreciate the dedication of our talented team members across the organization, who have been instrumental to the successful execution of our strategy.”
Luigi Lazzareschi, chief executive officer of Sofidel, said the purchase of Clearwater Papers tissue business is an “important milestone on our path to meet the growing demand” for its products in the United States.
“We look forward to welcoming all the new employees into our family and integrating the tissue business into our network to strengthen our growth by achieving scale and expanding our ability to deliver sustainable, energy efficient products to customers,” Lazzareschi said in the release.
The sale of Clearwater to Sofidel could net the Spokane company about $850 million, which the company said it intends to use to invest in growth initiatives for its continuing operations, among other things.
The deal is expected to close later this year and is subject to customary closing conditions, including the waiting period mandated by federal anti-trust statutes. Goldman Sachs & Co. LLC is serving as Clearwater Paper’s financial advisor for the deal, according to the release.
The company also announced that it expects to release its second quarter results on Aug. 6.