Weyerhaeuser to enhance southern timberlands portfolio

Weyerhaeuser Company recently announced it has entered into two distinct agreements with Forest Investment Associates to divest approximately 69,600 acres in Upstate South Carolina for $170 million, and to purchase approximately 60,700 acres of high-quality timberlands in Coastal North Carolina, South Carolina and Mississippi for $163 million.

Key attributes of the transaction:

  • Adding high-quality timberlands with attractive timber attributes, including:
  • Mature, highly productive acreage that is well-integrated with existing Weyerhaeuser timberlands and mill operations.
  • Fee ownership with 80 percent planted pine acreage and strong site productivity, delivering strong long-term timber returns.
  • Well-stocked timber inventory producing attractive sawlog mix and expected average harvest of 6.9 tons per acre (or 420,000 tons) annually over the first five years.
  • Expected average Adjusted EBITDA from timber operations of approximately $130 per acre (or $7.7 million) annually over the first five years.
  • Acquiring core timberland acreage at an Adjusted EBITDA multiple of 21×1, while divesting less strategic ownership at an Adjusted EBITDA multiple of 47×1.
  • Opportunity to enhance real estate cash flows and returns on high-optionality coastal assets.
  • Structured as a tax-efficient like-kind exchange with minimal transaction costs.

Adjusted EBITDA multiple calculated as purchase price divided by Weyerhaeuser’s forecasted 5-year annual average Adjusted EBITDA from timber operations.

“This transaction represents a unique opportunity to further optimize Weyerhaeuser’s Southern Timberlands portfolio with high-quality, highly productive acreage that is well-integrated with our existing operations,” said Devin W. Stockfish, president and chief executive officer. “As we’ve demonstrated over the last several years, we are committed to active portfolio management across our unmatched timber holdings, and we remain focused on transactions that improve our cash flow and returns while creating long-term value for our shareholders.”

With this transaction, Weyerhaeuser will own or manage more than 870,000 acres of timberlands in North and South Carolina and approximately 1,190,000 in Mississippi.

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