Clearwater Paper to Acquire Cellu Tissue Holdings, Inc.
September 16 2010 - 8:00AM
Business Wire
Clearwater Paper Corporation (NYSE: CLW) today announced
it has agreed to acquire Cellu Tissue Holdings, Inc., an
Alpharetta, GA-based integrated manufacturer of tissue products
(NYSE: CLU), for approximately $502 million, including equity value
of approximately $247 million and net debt of approximately $255
million. Clearwater Paper will pay $12.00 per share in cash for
Cellu Tissue’s outstanding common stock and intends to fund the
acquisition using a combination of existing cash on hand and $350
million of debt financing. Clearwater Paper has secured a financing
commitment for the transaction from BofA Merrill Lynch.
Clearwater Paper believes the acquisition will be immediately
accretive to earnings per share before taking into account an
estimated $15-$20 million in net annual cost synergies expected by
the end of 2012. The acquisition has been unanimously approved by
both companies’ boards of directors and is expected to close in the
fourth quarter of 2010, following Cellu Tissue stockholder
approval, regulatory clearances, and other customary closing
conditions. Weston Presidio and Russell Taylor, Cellu Tissue’s
chief executive officer, which together own approximately 56% of
Cellu Tissue’s common stock outstanding, have agreed to vote their
shares in favor of the transaction.
“We are very pleased to have the opportunity to rapidly expand
our tissue manufacturing footprint through the acquisition of Cellu
Tissue and create a combined company with much stronger operational
scale to better serve private label tissue customers. This
acquisition, coupled with the previously announced construction of
our new tissue machine and converting facilities in Shelby, North
Carolina, is expected to provide both short and long-term value to
our shareholders,” said Gordon Jones, chairman, president and CEO.
“Clearwater Paper already has a national sales footprint, and this
acquisition gives us a rare opportunity to immediately have a
national manufacturing presence to increase service to our existing
private label grocery customers and expand into new private label
channels,” added Jones.
The expected strategic and financial benefits of the transaction
are as follows:
- Opportunity for Clearwater Paper
to establish a national manufacturing presence as a papermaker and
converter of tissue products
- Customer growth with existing
and new customers
- Increased Through-Air-Dried
(TAD) capacity
- Logistical improvements through
shipping and transportation synergies
- Combined company annual revenues
expected to be approximately $1.9 billion
- Immediate accretion to earnings
per share before synergies
- Expected annual net cost
synergies of $15-$20 million by the end of 2012
Cellu Tissue’s well-developed private label and specialty tissue
businesses, which include 10 sites, complement Clearwater Paper’s
existing private label tissue and pulp and paperboard
businesses.
In connection with the acquisition of Cellu Tissue, Clearwater
Paper intends to tender for or defease Cellu Tissue’s outstanding
11.50% senior secured notes due 2014.
BofA Merrill Lynch acted as financial advisor and Pillsbury
Winthrop Shaw Pittman LLP acted as legal advisor to Clearwater
Paper. Goldman, Sachs & Co. acted as financial advisor and King
& Spalding LLP acted as legal advisor to Cellu Tissue.
CONFERENCE CALL INFORMATION
A live audio webcast and conference call will be held today,
Thursday, September 16, 2010 at 8:30 a.m. Pacific time (11:30 a.m.
Eastern time). Investors may access the conference call by dialing
877-303-9241 (for U.S./Canada investors) or 760-666-3575 (for
international investors). The audio webcast may be accessed on the
company's Web site at http://ir.clearwaterpaper.com/events.cfm.
An accompanying presentation will be available for downloading at
the same site at 5:30 a.m. Pacific time (8:30 a.m. Eastern time).
The webcast will be audio only. Investors are recommended to
download the accompanying presentation prior to the call.
For those unable to participate in the call, an archived
recording will be available through the Clearwater Paper
Corporation Web site www.clearwaterpaper.com under "Investor
Relations" following the conference call.
FORWARD-LOOKING STATEMENTS SAFE HARBOR
This press release contains certain forward-looking statements
regarding the proposed transaction between Clearwater Paper and
Cellu Tissue, including but not limited to statements regarding
expected accretion to earnings, the estimated amount of annual
synergies resulting from the merger, expected combined company
annual revenues, the benefits of the proposed transaction to
Clearwater Paper stockholders, opportunities for growth with
existing customers and new customers in new channels, tissue
production facilities and the expected timing of closing. Actual
events or results may differ materially from those contained in
these forward-looking statements. Among the important factors that
could cause future events or results to vary from those addressed
in the forward-looking statements include, without limitation,
risks and uncertainties arising from the possibility that the
closing of the transaction may be delayed or may not occur;
difficulties with the integration process or the realization of the
benefits expected from the proposed transaction; Clearwater Paper's
ability to obtain debt financing to fund the acquisition price;
general economic conditions in the regions and industries in which
Clearwater Paper and Cellu Tissue operate; changes in the cost and
availability of wood fiber used in the production of the companies’
products; and litigation or regulatory matters involving antitrust
or other matters that could affect the closing of the transaction.
In addition, please refer to the documents that Clearwater Paper
and Cellu Tissue file with the Securities and Exchange Commission
("SEC") on Forms 10-K, 10-Q and 8-K. The filings by Clearwater
Paper and Cellu Tissue identify and address other
important factors that could cause events or results to vary
from the forward-looking statements set forth in this press
release. Clearwater Paper and Cellu Tissue are under no duty to
update any of the forward-looking statements after the date of this
press release to conform to actual results.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
Cellu Tissue intends to file with the SEC a preliminary proxy
statement and a definitive proxy statement and other relevant
material in connection the merger. The definitive proxy statement
will be sent or given to the stockholders of Cellu Tissue. Before
making any voting or investment decision with respect to the
merger, investors and stockholders of Cellu Tissue are urged to
read the proxy statement and the other relevant material when they
become available because they will contain important information
about the merger. The proxy statement and other relevant materials
(when they become available), and any other documents filed by
Cellu Tissue with the SEC, may be obtained free of charge at the
SEC's website at www.sec.gov, at Cellu Tissue's Investor Relations
website at cellutissue.com/investor (click "SEC filings") or
from Cellu Tissue by contacting Investor Relations by mail at 1855
Lockeway Drive, Suite 501, Alpharetta, Georgia 30004, Attention:
Investor Relations, or by telephone at (707) 407-2164.
PARTICIPANTS IN THE SOLICITATION
Clearwater Paper and Cellu Tissue and their respective directors
and executive officers may be deemed to be participants in the
solicitation of proxies from Cellu Tissue stockholders in
connection with the merger. Information about Clearwater Paper's
directors and executive officers is set forth in Clearwater Paper's
proxy statement on Schedule 14A filed with the SEC on March
29, 2010 and its Annual Report on Form 10-K for the year ended
December 31, 2009 filed with the SEC on February 26, 2010,
respectively. Information about Cellu Tissue's directors and
executive officers is set forth in its proxy statement on Schedule
14A filed with the SEC on June 25, 2010. Additional
information regarding the interests of participants in the
solicitation of proxies in connection the merger will be included
in the proxy statement that Cellu Tissue intends to file with the
SEC.
ABOUT CLEARWATER PAPER
Clearwater Paper manufactures quality consumer tissue, bleached
paperboard and wood products at six facilities across the country.
The company is a premier supplier of private label tissue to major
retail grocery chains, and also produces bleached paperboard used
by quality-conscious printers and packaging converters. Clearwater
Paper’s 2,500 employees build shareholder value by developing
strong customer partnerships through quality and service.
ABOUT CELLU TISSUE HOLDINGS
Cellu Tissue Holdings, Inc. is a North American producer of
tissue products, with a focus on consumer-oriented private label
products and a growing presence in the value retail tissue market.
For more information, visit Cellu Tissue’s website at
www.cellutissue.com.
For additional information on
Clearwater Paper, please visit our website at
www.clearwaterpaper.com.
ClearWater Paper (NYSE:CLW)
Historical Stock Chart
From May 2024 to Jun 2024
ClearWater Paper (NYSE:CLW)
Historical Stock Chart
From Jun 2023 to Jun 2024