Clearwater Paper unveils financial performance and strategy for fourth quarter and year-end 2023
The company announces agreement to acquire Graphic Packaging mill, projecting significant boost in financial performance
Clearwater Paper, a leading paper company, has announced a definitive agreement to acquire Graphic Packaging’s bleached paperboard manufacturing facility in Augusta, Georgia, for $700 million. This strategic acquisition is expected to generate $140 million to $150 million in adjusted EBITDA annually by the end of 2026, strengthening its position as a leading supplier of paperboard in North America.
The Augusta mill has an annual capacity of approximately 600,000 tons of bleached paperboard, making it an asset for Clearwater Paper. Arsen Kitch, president and chief executive officer said, “After a thorough strategic review, we have determined that the acquisition of Augusta will be a great fit for Clearwater Paper as it will add scale and capacity for growth to enhance our position as a leading independent supplier of paperboard to North American converters.” “We remain optimistic about the long-term outlook for paperboard as consumers seek sustainable solutions in packaging and foodservice. With this acquisition, Clearwater Paper will be well positioned to serve customers with high-quality paperboard capabilities and a large manufacturing presence throughout North America.”
The transaction is subject to regulatory approvals and other customary conditions and is expected to close in the second quarter of 2024.
In addition, Clearwater Paper reported its fourth quarter and full-year financial results. Despite a decline in net sales in the fourth quarter of 2023, the company reported solid performance in terms of net income and adjusted EBITDA. For the full year 2023, net sales remained stable compared to the previous year, while adjusted EBITDA experienced a significant increase.
For the Pulp & Paperboard and Consumer Products segments, Clearwater Paper recorded both increases and decreases in sales volumes and selling prices, with mixed results in each segment.
Looking ahead, the company expects continued strength in its tissue business in 2024, along with a recovery in paperboard demand in the second half of the year. Completion of the Augusta acquisition is also expected in the second quarter of this year, which will further position Clearwater Paper for future growth.
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