Clearwater Paper sells tissue operations to Sofidel for $1B

Clearwater Paper has reached a deal to sell its tissue operations to Sofidel, a company headquartered in Lucca, Italy, for $1.06 billion.

The transaction would include Clearwater Paper’s tissue operations in Lewiston, Las Vegas, Shelby, N.C., and Elwood, Ill., near Chicago, according to a news release about the agreement from Sofidel.

The Lewiston, Las Vegas and Shelby sites all have machines that manufacture tissue then cut and package it into private-label products such as toilet paper, paper towels, paper napkins and facial tissue for retail customers who sell it under their own brands. The facilities at Elwood cut and package tissue from large parent rolls.

The deal is expected to close later this year and is subject to customary closing conditions, according to a Monday Clearwater Paper news release.

Sofidel was founded in 1966 and makes 1.4 million tons of paper each year, including its most famous brand, Regina. It has 6,900 employees in Europe and the United States, according to Sofidel’s website.

“The acquisition of Clearwater Paper’s tissue business is another important milestone on our path to meet the growing demand for our products in the United States,” said Luigi Lazzareschi, CEO of Sofidel, in Monday’s news release.

Clearwater Paper employs about 1,300 people in Lewiston where it has its largest manufacturing complex, the only place where it makes pulp, tissue and paperboard.

About 500 of Clearwater Paper’s Lewiston employees work in the part of the operation that would be part of the acquisition, said Matt Van Vleet, a spokesperson for Clearwater Paper.

Sofidel is assuming the collective bargaining agreements of the tissue operations, Van Vleet said.

“We look forward to welcoming all the new employees into our family and integrating the tissue business into our network to strengthen our growth by achieving scale and expanding our ability to deliver sustainable, energy efficient products to customers,” Lazzareschi said.

The pulp operations in Lewiston are not part of what will be sold to Sofidel, which will buy pulp for Lewiston, Van Vleet said.

The majority of the pulp used in the tissue Clearwater Paper makes in Lewiston is manufactured in Lewiston from cedar, fir and pine trees, Van Vleet said.

The remainder is hardwood pulp purchased from the United States, Canada and Brazil, Van Vleet said.

A service agreement will govern the use of utilities such as electricity, steam and water at the Lewiston site, Van Vleet said.

The deal announced Monday comes about five months after Clearwater Paper President and CEO Arsen Kitch said his company was evaluating strategic options for its tissue operations.

It also is happening as Clearwater Paper is finishing significant upgrades at its Lewiston plant that involved more than 800 contracted crew members from around the world.

Initial figures from Clearwater Paper in late March put the estimated cost of the project at $75 million, including $37 million to rebuild one of two recovery boilers used in a process that converts wood chips into pulp for tissue and paperboard.

The 15-story-tall recovery boiler was originally constructed in 1988 and is where the expensive chemicals required for pulp making are recovered so they can be reused.

The recovery boilers and a wood waste boiler create steam, which runs equipment and is channeled through turbines that generate electricity.

Williams may be contacted at ewilliam@lmtribune.com or (208) 848-2261.