Clearwater Paper to offload tissue business Sofidel for US$1.06B

24 Jul 2024 --- Clearwater Paper Corporation, a supplier of quality consumer tissue and bleached paperboard, has entered into a definitive agreement to sell its tissue business to Sofidel America Corporation, a subsidiary of Sofidel, for US$1.06 billion.

The transaction represents the next step in the company’s transformation to become an independent supplier of paperboard to North American converters and the conclusion of its previously announced review of strategic options for the tissue business.

“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,” says Arsen Kitch, president and CEO of Clearwater Paper.

“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. We look forward to delivering innovative and sustainable products to our converter customers while generating strong returns for our shareholders.”

Kitch maintains the tissue business has delivered “excellent financial and operational performance.”

“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.”

Transaction details
The US$1.06 billion price represents a multiple of approximately six times the Adjusted EBITDA of Clearwater Paper’s tissue segment during the twelve months ending March 31, 2024.

The company expects net proceeds from the transaction of approximately US$850 million, which it intends to use to meaningfully delever its balance sheet and invest in growth initiatives for its continuing operations.

“The acquisition of Clearwater Paper’s tissue business is another important milestone on our path to meet the growing demand for our products in the United States,” says Luigi Lazzareschi, CEO of Sofidel.

The transaction is expected to close in the latter part of 2024, subject to customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Goldman Sachs is serving as financial advisor to Clearwater Paper and Pillsbury Winthrop Shaw Pittman is serving as legal advisor.

The deal is subject to adjustments for debt, cash, transaction expenses and net working capital.

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