ROME (dpa-AFX) - Clearwater Paper Corp. (CLW), a supplier of consumer tissue and bleached paperboard, announced Monday that it has entered into a definitive agreement to sell its tissue business to Sofidel America Corp., a unit of Italian paper maker Sofidel S.p.A., for $1.06 billion.
The deal price is subject to adjustments for debt, cash, transaction expenses and net working capital.
According to Clearwater Paper, the sale, following the review of strategic options for the business, represents the next step in its transformation to become a premier independent supplier of paperboard to North American converters.
The sale is expected to close in the latter part of 2024, subject to customary closing conditions. Net proceeds from the transaction of around $850 million are projected to be used to meaningfully delever its balance sheet and invest in growth initiatives for its continuing operations.
In the deal, Goldman Sachs & Co. LLC is serving as financial advisor to Clearwater Paper, and Pillsbury Winthrop Shaw Pittman LLP is serving as legal advisor.
Arsen Kitch, President and Chief Executive Officer, said, '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. 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.'
Further, Luigi Lazzareschi, Chief Executive Officer of Sofidel, said the acquisition of the tissue business is another important milestone on its path to meet the growing demand for its products in the United States.
In a separate release, Clearwater Paper announced that it will release its second-quarter results on August 6.
In pre-market activity on the NYSE, Clearwater Paper shares were gaining around 2.2 percent to trade at $50.
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