SPOKANE, Wash., Sep 16, 2010 (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.
SOURCE: Clearwater Paper Corporation
Clearwater Paper Corporation
News media:
Matt Van Vleet, 509-344-5912
or
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Linda Massman, 509-344-5905
or
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Sean Butson, 509-344-5906
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