Thu, April 25, 2024

Multi-million dollar sale of major Augusta manufacturer

Clearwater Paper Corporation will acquire Graphic Packaging, a bleached paperboard manufacturing facility, for $700 million based on adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of approximately $100 million.

Cal Wray, President of the Augusta Economic Development Authority (AEDA), told ABD he has spoken with Graphic Packaging about the transaction.

“The facility in Augusta fits into the portfolio of Clearwater much better, which should mean longer-term access to growth for the Augusta facility because it’s a better fit within Clearwater,” he said.

Graphic Packaging CEO, Michael Doss called the Augusta plant an outstanding asset with a great team.

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

Clearwater Paper, based in Washington state, was founded in 1926. It is a private brand tissue manufacturer and producer of paperboard products.

Arsen Kitch, CEO of Clearwater Paper, called the Augusta plant a great fit with his company’s strategy and will improve his company’s position as an independent paperboard supplier, adding, “I look forward to welcoming the Augusta team to Clearwater Paper as we work together to build a more scaled paperboard business to service our customers.”

The facility on Mike Padgett Highway was built in the early 1960’s as Continental Can. It became Federal Paper Board in the mid-1980’s until it became International Paper in 1996.

Ruth Davila, VP of Global Communications for Atlanta-based Graphic Packaging International, LLC, told ABD they have approximately 660 employees at the Augusta facility.

Wray believes Clearwater’s $700 million investment bodes well for the future of the plant.

“International, for the last three to five years they owned the facility, had stopped putting capital into it. And when you see a company stop investing capital into a facility, that normally has bad news written all over it,” he explained.

When Graphic Packaging took over and invested $350 million in the facility, it gave new life to the plant.

“Time will tell with Clearwater, but if they’re paying $700 million for it, you would think their thought process would be that they would continue to run it, continue investing in the facility,” Wray said. “And it’s not like they’re acquiring a series of facilities. Sometimes, that can be bad news, but them acquiring one facility for that type of money. That is normally good news for the facility.”

The purchase still faces regulatory review and is expected to be finalized in the second quarter of 2024.

“I’m sure there will be changes, just because it’s a different culture, a different way of doing business. And only time will tell if those are good or bad changes. But I would say, the future would be positive for the facility,” Wray said.

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