Clearwater Paper Completes Acquisition of Cellu Tissue

Dec. 27, 2010 - Clearwater Paper Corporation today announced it has completed its acquisition of Cellu Tissue Holdings, Inc., an Alpharetta, Georgia-based manufacturer of tissue products. Clearwater Paper, headquartered in Spokane, Wash., 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.”

“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,” said Bob DeVleming, vice president of consumer products. “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.

On December 27, 2010, and 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 11˝% Senior Secured Notes due 2014. The tender offer expired at 11:00 a.m., New York City time, on December 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for the tender offer, the aggregate principal amount of Cellu Tissue notes that were validly tendered and not validly withdrawn prior to the expiration time was $234.479 million, representing 99.99% in aggregate principal amount of the Cellu Tissue Notes. Clearwater Paper has accepted for purchase all Cellu Tissue Notes validly tendered and not validly withdrawn prior to the expiration time, with settlement occurring today, December 27, 2010.

SOURCE: Clearwater Paper Corp.