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Clearwater Paper Acquires Cellu Tissue Holdings

Spokane, Washington, USA, 27 December 2010 -- (BUSINESS WIRE) -- Clearwater Paper Corporation (NYSE:CLW) has completed its acquisition of Cellu Tissue Holdings, Inc., a manufacturer of tissue products in Alpharetta, Georgia. Clearwater Paper, headquartered in Spokane, Washington, now has 14 manufacturing locations in the United States and Canada, with a 15th under construction at Shelby, North Carolina.

"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."

Clearwater Paper paid USD 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 USD 375 million of debt financing. The purchase price was approximately USD 530 million, including equity value of approximately USD 247 million, retired debt of approximately USD 267 million, and assumed debt of approximately USD 16 million. The retired debt amount included approximately USD 32.5 million from Cellu Tissue's credit facility.

On 27 December 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 11½% senior secured notes due 2014. The tender offer expired on 27 December. 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for the tender offer, the aggregate principal amount of Cellu Tissue notes that were validly tendered and not validly withdrawn before the expiration time was USD 234.479 million, representing 99.99% in aggregate principal amount of the Cellu Tissue notes. Clearwater Paper has accepted for purchase all Cellu Tissue notes validly tendered and not validly withdrawn before the expiration time, with settlement occurring 27 December 2010.

Clearwater Paper manufactures quality consumer tissue, away-from-home tissue, hard roll tissue, machine glazed tissue, bleached paperboard, pulp, and wood products at 14 manufacturing locations in the United States and Canada. The company is a premier supplier of private label tissue to major retailers and wholesale distributors, including grocery, drug, mass merchants and discount stores. The company also produces bleached paperboard used by printers and packaging converters. Clearwater Paper's 3700 employees build shareholder value by developing strong customer partnerships through quality and service.


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