8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)      March 21, 2007

Cellu Tissue Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	333-118829		06-1346495
(State or other jurisdiction	(Commission		(IRS Employer
of incorporation)	File Number)		Identification No.)
1855 Lockeway Drive, Suite 501
Alpharetta, Georgia		30004
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code      (678) 393-2651

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01.              Completion of Acquisition or Disposition of Assets

On March 21, 2007, Cellu Tissue Holdings, Inc. (“Cellu Tissue”) issued a press release announcing that Cellu Tissue has consummated the acquisition of CityForest Corporation (the “Target”) pursuant to a Merger Agreement by and among Cellu Tissue, Target, Cellu City Acquisition Corporation (“Merger Sub”) and Wayne Gullstad as the shareholders’ representative.  The aggregate merger consideration paid (including assumption of $19 million in aggregate principal amount of industrial revenue bonds) is approximately $61 million and is subject to certain working capital and net cash adjustments which may occur after the closing.

Item 9.01.              Financial Statements and Exhibits

The financial statements required by this item are not included in this Current Report on Form 8-K and will be filed as soon as is reasonably practicable.

The following items are being furnished as exhibits to this Current Report on Form 8-K:

99.1Release, dated March 21, 2007, “Cellu Tissue Holdings, Inc. Completes Acquisition of CityForest Corporation” furnished pursuant to Item 2.01.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Cellu Tissue Holdings, Inc.
	(Registrant)
Date: March 22, 2007	By:	/s/ Dianne M. Scheu
		Ms. Dianne M. Scheu
		Senior Vice President, Finance and
		Chief Financial Officer

EXHIBIT INDEX

99.1 Release, dated March 21, 2007, “Cellu Tissue Holdings, Inc. Completes Acquisition of CityForest
Corporation”

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Cellu Tissue Holdings, Inc. Completes Acquisition of CityForest Corporation

Alpharetta, Ga. — March 21, 2007— Cellu Tissue Holdings, Inc. (“Cellu Tissue”) announced today that it has consummated the acquisition of CityForest Corporation (“CityForest”).  Cellu Tissue-CityForest LLC, the acquired business, is a wholly-owned subsidiary of Cellu Tissue.

CityForest is a Ladysmith, Wisconsin-based manufacturer of tissue paper parent rolls for converters that resize and convert the rolls into napkins, towels, bath tissue, specialty medical tissue, industrial wipers and facial tissue. The majority of CityForest’s sales are to converters serving the commercial (“away-from-home”) market, the consumer (“at-home”) market, as well as state and federal government agencies and the medical industry.  CityForest is solely focused on manufacturing tissue hard rolls and does not currently convert rolls into finished products.

Cellu Tissue manufactures and markets a variety of specialty tissue hard rolls and machine-glazed paper used in the manufacture of various end products, including diapers, facial and bath tissue, assorted paper towels and food wraps. In addition, Cellu Tissue produces a variety of converted tissue products. Cellu Tissue’s customers include major North American producers of branded and unbranded disposable consumer absorbent and tissue products for the personal and health care markets; consumer and away-from-home tissue products companies; national and regional tissue products distributors; and third-party converters who sell their products to food, bakery and confections companies. Cellu Tissue services a diverse group of high-quality customers, with three of its top 10 customers belonging to the Fortune 150 group of companies.

The statements contained in this release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended including statements regarding the expected timing, completion and effects of the proposed acquisition.  Readers are cautioned not to place undue reliance on these forward-looking statements and any such forward-looking statements are qualified in their entirety by reference to the following cautionary statements. All forward-looking statements included in this document are based upon information available to Cellu Tissue as of the date hereof, and Cellu Tissue assumes no obligation to update any such forward-looking statement. Cellu Tissue cautions you that any forward looking information is based on current expectations and involve a number of assumptions, risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. Factors that may affect the business or financial results of Cellu Tissue are described in Cellu Tissue’s filings with the SEC, including in its annual report on Form 10-K for the fiscal year ended February 28, 2006.

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