Clearwater Paper Corp

Current report

RISKS RELATING TO THE SALE OF OUR CONSUMER PRODUCTS DIVISION (OUR TISSUE BUSINESS)

Current report

We may fail to complete the divestiture of our consumer products division (our tissue business), and a completed divestiture may disrupt our remaining business or not achieve its intended benefits.

Current report

On July 21, 2024, the Company entered into a Membership Interest Purchase Agreement and an Asset Purchase Agreement with Sofidel America Corp. (“Sofidel”), a wholly owned subsidiary of Sofidel S.p.A., pursuant to which, among other things, the Company agreed to sell our consumer products division (the “Tissue Business”) to Sofidel (the “Tissue Divestiture”). The Tissue Divestiture is expected to close in the fourth quarter of 2024, subject to regulatory approvals and other customary closing conditions. A number of risks and challenges may arise in consummating the Tissue Divestiture, including, among others:

Current report

•one or more closing conditions to the Tissue Divestiture, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise;

Current report

•the Tissue Divestiture may not be completed in the time frame expected by the parties, or at all;

Current report

•there may be unexpected costs, charges or expenses resulting from the Tissue Divestiture; and

Current report

•there may be stockholder litigation in connection with the Tissue Divestiture or other settlements or investigations may affect the timing or occurrence of the Tissue Divestiture or result in significant costs of defense, indemnification and liability.

Current report

In addition, the Tissue Divestiture could cause disruption in our remaining business, including potential adverse changes to relationships with customers, employees, suppliers or other parties resulting from the divestiture process. The Tissue Divestiture may also be disruptive to our regular operations, diverting the attention of our workforce and management team from the day-to-day operation of our business, making the execution of business and other potential strategies more difficult, and could result in increased undesired workforce turnover, including of key leaders or other personnel.

Current report

Even if we are successful at separating and divesting our Tissue Business, we may not realize some or all of the anticipated benefits from the Tissue Divestiture with respect to the anticipated performance of our remaining business. The Tissue Divestiture may result in continued financial exposure to the Tissue Business through the retention of certain liabilities, including, for example, with respect to certain environmental claims. The Tissue Divestiture may not enhance long-term stockholder value as anticipated and/or the efforts required to complete the divestiture process may be more costly or time-consuming than expected. Any of the foregoing could result in the imposition of obligations that could have a material adverse effect on our remaining business, operating results or financial condition.