Weyerhaeuser to enhance southern timberlands portfolio

Photo By Weyerhaeuser

SEATTLE -- Weyerhaeuser Company 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 timberlands in Coastal North Carolina, South Carolina and Mississippi for $163 million.

"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," Devin W. Stockfish, president and chief executive officer. 

Key attributes of the transaction:

•    Adding high-quality timberlands with attractive timber attributes, including:

 o    Mature, highly productive acreage that is well-integrated with existing Weyerhaeuser timberlands and mill operations.
 o    Fee ownership with 80 percent planted pine acreage and strong site productivity, delivering strong long-term timber returns.
 o    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.
 o    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 21x1, while divesting less strategic ownership at an Adjusted EBITDA multiple of 47x1.

•    Structured as a tax-efficient like-kind exchange with minimal transaction costs.

"As we've demonstrated over the last several years,” Stockfish continues, “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."

The company employs more than 1,300 people and has significant operations and infrastructure across the three states. The transaction is subject to customary closing conditions and is expected to close in the fourth quarter of 2023.

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Dakota Smith | Editorial Intern

Dakota Smith is an undergraduate student at New Jersey City University studying English and Creative Writing. He is a writer at heart, and a cook by trade. His career goal is to become an author. At Woodworking Network, Dakota is an editorial intern, ready to dive into the world of woods and words.