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.
