Clearwater Paper to sell tissue business to Sofidel America Corp.

Clearwater Paper Corp. has entered into a definitive agreement to sell its tissue business to Sofidel America Corp., a subsidiary of Italy-based Sofidel S.p.A., for $1.06 billion, subject to adjustments for debt, cash, transaction expenses and net working capital.

The Spokane, Washington-based company says the transaction represents the next step in Clearwater Paper’s transformation into a premier independent supplier of paperboard to North American converters and the conclusion of its review of strategic options for the tissue business.

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The $1.06 billion price represents a multiple of approximately six times the adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, of Clearwater Paper’s tissue segment during the 12 months ending March 31. Clearwater Paper expects net proceeds from the transaction of approximately $850 million, which it intends to use to meaningfully delever its balance sheet and invest in growth initiatives for its continuing operations.

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

Clearwater Paper President and CEO Arsen Kitch says the company believes the transaction positions Clearwater Paper for its next chapter of growth and value creation.

“Clearwater Paper is transforming into a premier paper supplier in North America," Kitch says. "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.”

Clearwater Paper used nearly 13 percent preconsumer recovered paper in its tissue products in 2022, according to its “2023 Sustainability Report,” and nearly 6 percent preconsumer recovered paper in its paperboard products,

“Our tissue business has delivered excellent financial and operational performance, supported by outstanding service,” Kitch says. “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.”

“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," adds Luigi Lazzareschi, CEO of Sofidel, with U.S. corporate offices in Horsham, Pennsylvania. "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.”