The transaction is set for completion in Q2 2024. Credit: rafapress via Shutterstock.

Graphic Packaging has entered into agreement with Clearwater Paper to divest its Augusta, US, bleached paperboard manufacturing facility. 

The deal is valued at approximately $700m, reflecting adjusted earnings before interest, taxes, depreciation, and amortisation of around $100m. 

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Graphic president and CEO Michael Doss said: “Augusta is an outstanding asset with a great team, which we concluded is a more compelling fit with Clearwater Paper’s strategic growth plans than our own.  

“Bleached paperboard plays a major role in sustainable consumer packaging, and we will continue to service growing foodservice and packaging demand with bleached paperboard from our Texarkana facility.” 

The transaction is subject to regulatory approvals and is expected to conclude in the second quarter (Q2) of this year.  

TD Securities acted as the financial advisor for Clearwater Paper while Pillsbury Winthrop Shaw Pittman served as the lead transaction counsel.  

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Meanwhile, Graphic was advised by BofA Securities and Alston & Bird during the transaction. 

Clearwater Paper CEO Arsen Kitch said: “Augusta is a great fit with our strategy and improves our position as a premier, independent paperboard supplier to North American converters.”  

Separately, Graphic reported its financial results for financial year 2023, delivering a net income of $723m, which is 39% above the previous year’s figure of $522m.  

The company’s earnings per diluted share rose by 38% to $2.34 while net sales were flat at $9.428bn for full-year 2023 versus $9.440bn the previous year.  

This $12m decrease was attributed to an unfavourable volume/mix impact of $580m, partially offset by a positive pricing impact of $556m and a favourable foreign exchange impact of $12m.