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Home » Clearwater set to raise $375 million

Clearwater set to raise $375 million

Spokane-based concern to use funds to finance announced acquisition

October 21, 2010
Chey Scott

Clearwater Paper Corp., the big Spokane-based maker of tissue and paperboard products, says it plans to raise $375 million in a private placement of senior notes, to help pay for its planned acquisition of Georgia-based Cellu Tissue Holdings Inc.

Clearwater announced in September that it had agreed to acquire Cellu Tissue for $502 million, including $255 million in Cellu Tissue debt that it would assume. That transaction, which is expected to close sometime before the end of the year, includes four tissue-converting facilities and seven paper mills .

The Spokane company says that net proceeds from its sale of the senior notes will be used to refinance that Cellu Tissue debt and to fund part of the rest of the acquisition, as well as expenses from the offering.

The notes will mature in 2018 and will carry an annual interest rate of 7 1/8 percent, Clearwater says.

Because the acquisition of Cellu Tissue is still pending, the proceeds from the notes will be placed in escrow until the acquisition closes.

Clearwater has said it agreed to buy Cellu Tissue to boost its national presence as a private-label tissue manufacturer. Clearwater has six production facilities across the U.S. and employs 2,500 people. It was spun off by Potlatch Corp., a Spokane-based timber and wood-products company, in 2008.

Cellu Tissue makes products similar to Clearwater's, and was one of its biggest national competitors.

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