Clearwater Completes Cellu Tissue Acquisition

Clearwater Paper Corp., Spokane, Wash., USA, has completed its acquisition of Cellu Tissue Holdings, Inc., an Alpharetta, Ga., USA-based manufacturer of tissue products. Clearwater now has 14 manufacturing locations in the U.S. and Canada, with a fifteenth under construction at Shelby, N.C.

"The acquisition significantly expands our tissue business to serve a broad customer base through a truly national network of sales and management professionals, talented manufacturing employees, and strategically located production facilities," said Gordon Jones, chairman, president, and CEO. "The acquisition supports our strategy to grow our private label tissue business while providing the opportunity to diversify into new channels."

Bob DeVleming, VP of consumer products, said that "we are excited about the opportunities the combined company offers our customers, and are pleased to welcome our new employees to the Clearwater Paper family. We are ready to put the combined talents of all of our employees into action to best support Clearwater Paper's existing and new customers."

Clearwater Paper paid $12 per share in cash for Cellu Tissue's outstanding common stock and funded the acquisition using a combination of existing cash on hand and $375 million of debt financing. The purchase price was approximately $530 million, including equity value of approximately $247 million, retired debt of approximately $267 million, and assumed debt of approximately $16 million. The retired debt amount included approximately $32.5 million from Cellu Tissue's credit facility.

In connection with the acquisition of Cellu Tissue, Clearwater Paper also completed its previously announced cash tender offer to purchase any and all of Cellu Tissue's outstanding 11½% Senior Secured Notes due 2014. The tender offer expired at 11:00 a.m., New York City time, on Dec. 27, 2010. Based on the final tabulation provided by D.F. King & Co., Inc., the depositary and information agent for the tender offer, the aggregate principal amount of Cellu Tissue notes that were validly tendered and not validly withdrawn prior to the expiration time was $234.479 million, representing 99.99% in aggregate principal amount of the Cellu Tissue Notes.

Clearwater Paper manufactures consumer tissue, away-from-home tissue, hard roll tissue, machine glazed tissue, bleached paperboard, pulp, and wood products at 14 manufacturing locations in the U.S. and Canada. The company also produces bleached paperboard used by printers and packaging converters.