Clearwater Paper Corp. will buy Georgia-based competitor Cellu Tissue Holdings Inc. for $502 million, the two companies announced this morning.
Spokane-based Clearwater will pay Cellu Tissue stockholders $12 per share, and assume $255 million in debt, in a deal a Clearwater statement said should increase earnings immediately.
Combined revenues are projected to be $1.9 billion.
Cellu Tissue operates 10 paper-making or conversion plants in the United States from its headquarters in Apharetta, Ga. Many make private-label tissue products like those manufactured by Clearwater, but others make coated-paper products.
Another plant makes styrofoam plates and similar products.
Cellu Tissue stock jumped 50 percent on the news, Clearwater shares traded down $1.35 to $71.32, off less than two percent.