Clearwater Paper to acquire Cellu Tissue Holdings for $247 million

Clearwater Paper to acquire Cellu Tissue for $247M

SPOKANE, Wash. — Clearwater Paper Corp. said Thursday it will pay $12 per share to acquire Cellu Tissue Holdings Inc. in a $247 million deal.

Clearwater, which is based in Spokane, Wash., said the deal includes net debt of about $255 million, which brings its total value to $502 million. It will pay for the acquisition with cash on hand and $350 million in debt financing.

Cellu Tissue stock jumped $3.95, or 50 percent, to $11.88 in Thursday afternoon trading, while Clearwater shares fell $2.02, or 2.7 percent, to $70.81.

The share price for the deal is $1 lower than the $13 at which Cellu Tissue priced its initial public offering of stock in January. The company raised about $107.9 million with the IPO but had hoped shares would fetch $15 to $17 each.

Clearwater makes consumer tissue, bleached paperboard and wood products.

Chairman and CEO Gordon Jones said in a statement the addition of Cellu Tissue, based in Alpharetta, Ga., allows it to rapidly expand its tissue manufacturing footprint, and it creates a combined company “with much stronger operational scale to better serve private label tissue customers.”

The deal has been approved by the boards of directors for both companies and is expected to close in the fourth quarter.

Clearwater has secured financing from BofA Merrill Lynch.