Posts tagged: Clearwater Paper
Investor Malaise, Spokane version, round three.
SAC Capital Advisors, a fairly large hedge fund operated by Steven A. Cohen, is pushing the directors of Spokane-based Clearwater Paper to split its operations so it can sell off one or both.
SAC is a big fund. It owns 1.6 million Clearwater shares, about 7 percent of the company's common stock.
This is not the first time this year investors have squawked at publicly traded Spokane firms and got actively behind efforts to shake things up. A Seattle investor group has been pushing Red Lion Hotels Corp. to make major changes or sell of all or part of its assets to boost investor value.
And two East Coast funds pushed Ambassadors Group to change its board to revamp its marketing and operations, in light of the travel company's distress stock price.
The Cohen SAC initiative was listed in a recent SEC filing. Cohen said he had a meeting with Clearwater directors urging them to split the company and split it and “pursue the divestiture of one or both businesses to one or more strategic and/or financial buyers.”
He also asked the company to bring in an investment bank to locate possible buyers. He also wants to add two more independent directors to Clearwater's board.
Clearwater has one large operation dedicated to making tissue and toilet paper. It also has a another segment that makes bleached paperboard for food boxes and commercial printing products.
Clearwater Paper was the spinoff unit from Potlatch, which continues its focus as a timber company.
Clearwater's national headcount is roughly 3,700 employees.
Clearwater Paper Corp. has completed the sale of its Lewiston sawmill to Idaho Forest Group of Coeur d'Alene.
The $30 million transaction included the sawmill, planer mill, dry kilns, and related assets along with log and finished goods inventories and timber under contract.
As part of the sale, the two companies have entered into a long-term fiber supply agreement with the goal of delivering consistent supplies of chips and sawdust to Clearwater Paper's Lewiston pulp mill from Idaho Forest Group mills.
Clearwater Paper Corp. today reported first-quarter earnings, including a 41 percent increase in sales as the Spokane company melded newly-acquired Cellu Tissue Holdings Inc.'s operation into its results.
Net earnings were $5.6 million, or 47 cents per share, compared with $500,000, or four cents per share, for the 2010 quarter.
Results for both quarters were affected by tax- and pre-tax chanrges related to maintenance costs and health care reform legislation. Before allowances for taxes, interest costs, and depreciation and amortization, first-quarter earnings were $41.7 million, compared with $22.4 million for the 2010 quarter.
“As a result of the integration, we expect synergies to partially offset some of the higher pulp and transportation costs we have been experiencing in our tissue business,” said Chairman Gordon Jones, who added Clearwater would be raising tissue prices to partially offset the cost increaes.
Clearwater's purchase of Cellu Tissue closed Dec. 27.
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.