Sep 16, 2010. /Lesprom Network/. Clearwater Paper Corporation has agreed to acquire Cellu Tissue Holdings, Inc., an Alpharetta, GA-based integrated manufacturer of tissue products, for approximately $502 million, including equity value of approximately $247 million and net debt of approximately $255 million, company said in a statement received by Lesprom Network. Clearwater Paper will pay $12.00 per share in cash for Cellu Tissue’s outstanding common stock and intends to fund the acquisition using a combination of existing cash on hand and $350 million of debt financing. Clearwater Paper has secured a financing commitment for the transaction from BofA Merrill Lynch. Clearwater Paper believes the acquisition will be immediately accretive to earnings per share before taking into account an estimated $15-$20 million in net annual cost synergies expected by the end of 2012. The acquisition has been unanimously approved by both companies’ boards of directors and is expected to close in the 4Q 2010, following Cellu Tissue stockholder approval, regulatory clearances, and other customary closing conditions. Weston Presidio and Russell Taylor, Cellu Tissue’s CEO, which together own approximately 56% of Cellu Tissue’s common stock outstanding, have agreed to vote their shares in favor of the transaction. “We are very pleased to have the opportunity to rapidly expand our tissue manufacturing footprint through the acquisition of Cellu Tissue and create a combined company with much stronger operational scale to better serve private label tissue customers. This acquisition, coupled with the previously announced construction of our new tissue machine and converting facilities in Shelby, North Carolina, is expected to provide both short and long-term value to our shareholders,” said Gordon Jones, Chairman, President and CEO. “Clearwater Paper already has a national sales footprint, and this acquisition gives us a rare opportunity to immediately have a national manufacturing presence to increase service to our existing private label grocery customers and expand into new private label channels,” added Jones. Cellu Tissue’s well-developed private label and specialty tissue businesses, which include 10 sites, complement Clearwater Paper’s existing private label tissue and pulp and paperboard businesses. In connection with the acquisition of Cellu Tissue, Clearwater Paper intends to tender for or defease Cellu Tissue’s outstanding 11.50% senior secured notes due 2014. Clearwater Paper manufactures quality consumer tissue, bleached paperboard and wood products. The company is a premier supplier of private label tissue to major retail grocery chains, and also produces bleached paperboard. Cellu Tissue Holdings, Inc. is a North American producer of tissue products, with a focus on consumer-oriented private label products and a growing presence in the value retail tissue market.