Clearwater Paper to sell tissue business to Sofidel America for US$1.06 Billion

Clearwater Paper Corporation, a leading supplier of consumer tissue and bleached paperboard, announced a definitive agreement to sell its tissue business to Sofidel America Corporation, a subsidiary of Sofidel S.p.A., for US$1.06 billion. This transaction marked a significant step in Clearwater Paper’s transformation strategy to become a premier independent paperboard supplier to North American converters and concludes its strategic review of 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”, stated Arsen Kitch, president and CEO. “Clearwater Paper is transforming into a premier paper supplier in North America. 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 emphasized the performance and potential of the tissue business, adding: “Our tissue business has delivered excellent financial and operational performance, supported by outstanding service. 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, CEO of Sofidel, highlighted the strategic importance of the acquisition, stating: “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. 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”.

The US$1.06 billion price reflects a multiple of approximately six times the adjusted EBITDA of Clearwater Paper’s tissue segment for the twelve months ending March 31, 2024. Clearwater Paper anticipates net proceeds of approximately US$850 million from the transaction, which will be used to reduce debt and invest in growth initiatives for its ongoing operations. The transaction is expected to close in late 2024, pending customary closing conditions, including the expiration or termination of the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Goldman Sachs & Co. LLC is acting as financial advisor to Clearwater Paper, and Pillsbury Winthrop Shaw Pittman LLP is serving as legal advisor.