The board of directors at Potlatch Corp., Spokane, Wash., has given final approval to the spin-off of its pulp and paperboard businesses, which will be completed through a special tax-free dividend of the common stock of Clearwater Paper Corp. Clearwater Paper will manufacture bleached paperboard, consumer tissue, and wood products at five plants across the country employing 2,400 workers.

“There are many benefits to operating Clearwater Paper as a stand-alone company and we expect the spin-off to provide increased opportunities for investors, employees and customers over the long-term,” says Gordon Jones, who will assume the role of president and ceo of Clearwater Paper.

Effective Dec. 9, shares will be redistributed to one share of Clearwater Paper stock for every 3.5 shares of Potlatch Corp. stock. The distribution of Clearwater Paper common stock will occur on Dec. 16. The spin-off will qualify as a tax-free distribution to Potlatch and its shareholders. Clearwater Paper common stock is expected to begin normal trading on the New York Stock Exchange under the ticker “CLW” on Dec. 17.

In connection with the spin-off, Clearwater Paper will retain the obligation to pay the interest and principal on $100 million principal amount of debentures previously issued by an affiliate of Potlatch. Clearwater Paper intends to immediately draw $50 million from its anticipated $125 million revolving credit facility and transfer that amount to a subsidiary of Potlatch. As a result, Clearwater Paper will have $150 million principal amount of debt outstanding.