Spokane-based tissue and paperboard maker Clearwater Paper Corp. has agreed to sell its tissue business for $1.06 billion to Sofidel America Corp., a subsidiary of Italian company Sofidel S.p.A.

The transaction is part of Clearwater Paper’s plans to focus on being a premier independent supplier of paperboard for North American customers to convert to other products, the company says.

Clearwater Paper’s facilities closest to Spokane are in Lewiston, Idaho, where it operates separate paperboard and tissue production plants. About 500 employees in its tissue division will transfer to Sofidel, says Matt Van Vleet, Clearwater Paper’s director of government and community relations.

Clearwater Paper has 800 employees in its Lewiston pulp and paperboard operations who will remain with the company, Van Vleet says.

The transaction is expected to close by year-end. Van Vleet says the transaction doesn’t require a vote by Clearwater’s shareholders.

Clearwater Paper says it expects net proceeds from the transaction of about $850 million, which it intends to use to improve its balance sheet and invest in growth initiatives for its continuing operations.

The stock price for Clearwater Paper (NYSE: CLW) was $55.88 per share at the market close on Monday, July 21, which is near a seven-year high and well above its 52-week low of $31.89 last August.

Goldman Sachs & Co. and Pillsbury Winthrop Shaw Pittman LLP, both based in New York, are respectively serving as Clearwater’s financial and legal advisers regarding the transaction.

“Clearwater Paper is transforming into a premier paper supplier in North America,” Arsen Kitch, company president and CEO, says in a press release. “Upon completion of this transaction, we intend to deleverage our balance sheet while scaling and diversifying our paperboard business to meet the needs of our customers.”

Sofidel is a manufacturer of paper for hygienic and domestic use.

“The acquisition of Clearwater Paper’s tissue business is another important milestone on our path to meet the growing demand for our products in the United States,” Sofidel CEO Luigi Lazzareschi says in the release. “We look forward to welcoming all the new employees into our family and integrating the tissue business into our network to strengthen our growth by achieving scale and expanding our ability to deliver sustainable, energy-efficient products to customers.”

Clearwater Paper’s tissue division also includes a plant with 600 employees in Shelby, North Carolina, where the company announced last month that it planned to invest $23 million in upgrades.

The company was formed in 2008 as a spinoff of Spokane-based forest products company Potlatch Corp., which merged with Deltic Timber Corp. in 2018 and took on the name PotlatchDeltic Corp.