SPOKANE, Wash. - Potlatch Corp. has announced it has purchased the smaller Deltic Timber in an all-stock deal that will boost its lumber capacity.
The transaction will combine the two companies into PotlatchDeltic Corp., which will be traded on Nasdaq as PCH. Potlatch shareholders will own around 65 percent of the company. The equity value of the offer is about $1.16 billion.
The combined company will run 2 million acres of timberlands, with approximately 1.1 million acres in the southern U.S., 600,000 acres in Idaho, and 150,000 acres in Minnesota. In addition, upon completion of the transaction, PCH will operate eight wood products manufacturing facilities, including six lumber manufacturing facilities, one MDF facility and one industrial plywood mill. In total, the combined company will have lumber capacity of 1.2 billion board feet, making it one of the leading producers in the U.S.
The company’s lumber capacity will be heavily weighted towards high-margin southern yellow pine lumber, with over half of the company’s capacity being produced at its three southern mills.
The combined PCH will have more than 1,500 employees and will serve over 200 customers.
"With Deltic, we gain significant scale particularly through nearly one million acres in Arkansas and substantially expanded sawmill capacity," said Mike Covey, Potlatch CEO. Together, we can realize significant productivity improvements by sharing best practices across both businesses, implementing optimal silvicultural practices, increasing harvest levels and improving lumber manufacturing volumes."
"We are confident that the combined company has the capacity to enhance value greatly in excess of what could be achieved by either company independently,” said Robert C. Nolan, Deltic chairman.
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