Lewiston firm looks to buy Georgia plant

Clearwater Paper expects to expand with the acquisition of Graphic Packaging’s Augusta, Ga., bleached paperboard manufacturing plant for $700 million.

The Spokane-headquartered company made the announcement Tuesday in the same news release where it reported a net income of $108 million in 2023, compared with $46 million in 2022.

The purchase of the Graphic Packaging operation is subject to regulatory approvals and other “customary conditions,” according to the news release. The transaction is expected to close in April, May or June of this year.

Clearwater Paper executives completed a “thorough strategic review” and determined that the Augusta facility would be “a great fit” to “add scale and growth capacity,” Clearwater Paper President and CEO Arsen Kitch said in the news release.

“The facility is a well-invested site with approximately 600 thousand tons of bleached paperboard annual capacity,” according to the news release. “Clearwater Paper expects this acquisition to contribute $140-150 million in adjusted (earnings before interest, taxes, depreciation and amortization) annually by the end of 2026, including through volume and cost synergies.”

The deal is part of an ongoing approach of Clearwater Paper.

“The company will explore strategic options for its tissue business as it intends to focus on growth in paperboard,” the news release read.

Clearwater Paper makes pulp, tissue and paperboard and is one of Lewiston’s largest employers. It has its largest manufacturing site in Lewiston, which is the only place where it produces all three.

The tissue is made into toilet paper, paper towels, paper napkins and facial tissue. Its paperboard is used for paper dishes and packaging.

“We remain optimistic about the long-term prospects for paperboard as consumers look for sustainable solutions in packaging and food service,” Kitch said in the news release. “With this acquisition, Clearwater Paper will be well positioned to service customers with high quality paperboard capacity and a great manufacturing footprint across North America.”

The decision to add to paperboard operations follows a profitable year for Clearwater Paper.

The “outstanding year” was driven by improvement in tissue, according to the news release.

The company has maintained its focus on cash flow generation and reduced its net debt by more than $450 million since 2020, Kitch said in the news release.

“We had a great year driven by a significant improvement in our tissue margins and strong operational execution across both businesses,” he said. “Tissue demand remained strong, and we benefited from favorable input costs. Paperboard demand was soft, but our team did a great job of balancing supply with demand to manage inventories.”

One factor in the results of the last three months of the year was a temporary loss in natural gas service in November that was briefly referenced in Tuesday’s news release.

“(A) natural gas disruption impacted Lewiston mill operations in November,” according to the news release, which didn’t provide additional specifics.

The problem affected more than 36,000 Avista customers and occurred after a farmer installing a drainage pipe north of Pullman allegedly hit an underground gas pipeline with a plow Nov. 8.

Clearwater Paper’s Tuesday news release will be discussed at 2 p.m. today in a conference call for stock market analysts that will be broadcast online.