Rayonier Upgrades Pacific Northwest Timberland Portfolio Through Acquisition of 61,000 Acres and Disposition of 55,000 Acres
02 Maio 2016 - 5:15PM
Business Wire
- Acquisition of 61,000 acres of
well-stocked, highly-productive timberlands in Oregon and
Washington for $263 million
- Disposition of 55,000 acres comprised
predominantly of pre-merchantable timber in Washington for $130
million
- Transactions significantly enhance
Rayonier’s Pacific Northwest portfolio by smoothing the age-class
distribution, increasing merchantable timber inventory* and
increasing both long-term and near-term harvest potential
- Pacific Northwest merchantable timber
inventory increases 42% from 666 MMBF (as of 9/30/2015) to 948
MMBF
- Pacific Northwest sustainable yield*
increases from 165 MMBF (1.3 million tons) to 178 MMBF (1.4
million tons); expected average annual harvest over next five years
increases from 130 MMBF (1.0 million tons) to 161 MMBF (1.3 million
tons)
- Transactions estimated to increase
average annual Adjusted EBITDA* and Cash Available for Distribution
(CAD)* by approximately $11 million and $7 million, respectively,
over the next five years
- Financing provided through 10-year,
$300 million incremental term loan with Farm Credit system;
weighted average interest rate of approximately 2.6%
Rayonier Inc. (NYSE:RYN) today announced the company has
completed two separate transactions to enhance its Pacific
Northwest timberland portfolio. The transactions include the
acquisition of approximately 61,000 acres of well-stocked,
highly-productive timberlands in Oregon and Washington, and the
disposition of approximately 55,000 acres comprised of
predominantly pre-merchantable timber in Washington. On a combined
basis, these transactions will smooth the age-class distribution
and materially improve the sustainable yield, near-term harvest
potential, species mix and market diversification of the company’s
Pacific Northwest timberland portfolio.
Menasha Acquisition: The first transaction involves the purchase
of Menasha Forest Products Corporation (“Menasha”) jointly with
Forest Investment Associates (“FIA”), a leading timberland
investment management organization (“TIMO”) based in Atlanta,
Georgia. Menasha is a privately held timberland REIT with
approximately 132,000 acres of timberland located in Oregon and
Washington, which since 2007 has been managed by Campbell Global, a
leading TIMO based in Portland, Oregon. Rayonier teamed with FIA to
acquire all of the outstanding common stock of Menasha. In a
subsequent transaction that is expected to close in the second
quarter, Rayonier and FIA will distribute the timberlands to
various entities, ultimately resulting in Rayonier owning an
identified portfolio of 61,000 acres of the Menasha timberlands for
a final purchase price of approximately $263 million. Following
this distribution, Rayonier and FIA will have no continuing
interest in or relationship with the assets of the other party. The
Menasha acquisition (average plantation age of 22.4 years)
complements the age-class profile of the company’s existing Pacific
Northwest portfolio (average plantation age of 19.0 years). The
property is comprised of approximately 85% operable lands and
contains merchantable timber inventory of approximately 326 MMBF
(2.6 million tons), of which an estimated 83% is Douglas-fir. The
acquisition is expected to increase the company’s sustainable yield
by approximately 38 MMBF (305,000 tons) per year and increase the
company’s average annual harvest over the next five years by
approximately 40 MMBF (320,000 tons).
Washington Disposition: The second transaction involves the sale
of approximately 55,000 acres of timberland located in Washington
to FIA for approximately $130 million. The Washington disposition
(average plantation age of 12.6 years) evens out the age-class
distribution of the company’s existing Pacific Northwest portfolio.
The property is comprised of approximately 75% operable lands and
contains merchantable timber inventory of approximately 44 MMBF
(350,000 tons), of which an estimated 28% is Douglas-fir. Excluding
the effect of the Menasha acquisition, the Washington disposition
would decrease the company’s sustainable yield by approximately 25
MMBF (200,000 tons) per year; however, average annual harvest over
the next five years is expected to decrease by only 9 MMBF (70,000
tons) from this disposition due to the younger age-class profile of
the property.
Concurrent with these transactions, Rayonier also entered into
an Incremental Term Loan Agreement with CoBank, ACB, as
administrative agent, and a syndicate of Farm Credit institutions
to provide a 10-year, $300 million incremental term loan. Proceeds
from the new term loan will be used to fund Rayonier’s portion of
the Menasha acquisition net of the proceeds received from the
Washington disposition (approximately $133 million), to repay
approximately $105 million outstanding on the company’s revolving
credit facility and for general corporate purposes. The company has
entered into an interest rate swap transaction to fix the cost of
$200 million of the term loan for its 10-year term (the remaining
$100 million will have a variable rate). Based on the swap rate,
the company’s current leverage ratio and the pricing grid, the
all-in cost of the fixed-rate portion of the term loan (net of
estimated patronage payments) is expected to be approximately 2.9%,
and the cost of the floating rate portion (net of estimated
patronage payments) is expected to be LIBOR + 1.33%.
“These transactions exemplify how Rayonier is improving value
for our shareholders through active portfolio management and
disciplined capital allocation,” said David Nunes, President and
CEO of Rayonier. “The combination of the Menasha acquisition and
the Washington disposition will upgrade our timberland portfolio by
increasing both our near-term harvest and long-term sustainable
yield, improving our species mix, smoothing our age-class
distribution, and diversifying our markets.
“Moreover, the acquisition of well-stocked timberland coupled
with the disposition of predominantly pre-merchantable timberland
will allow us to operate much closer to our long-term sustainable
yield in the Pacific Northwest over the next several years and
drive meaningful accretion to our CAD. We are very pleased to close
both transactions with the assistance of Forest Investment
Associates. Rayonier remains committed to building long-term
shareholder value, and we look forward to pursuing other
value-creating opportunities in the future.”
Supplemental materials regarding these transactions are
available at www.rayonier.com in our Investor Relations
section.
* References to “merchantable timber inventory,” “sustainable
yield,” “Adjusted EBITDA” and “cash available for distribution” (or
“CAD”) are as defined in our most recent annual report on Form
10-K.
About Rayonier
Rayonier is a leading timberland real estate investment trust
with assets located in some of the most productive softwood timber
growing regions in the United States and New Zealand. Rayonier
owns, leases or manages approximately 2.7 million acres of
timberlands located in the U.S. South, U.S. Pacific Northwest and
New Zealand. More information is available
at www.rayonier.com.
Forward-Looking Statements
This press release contains forward-looking statements, as
defined by the Private Securities Litigation Reform Act of 1995 and
other federal securities laws, related to the company’s inventories
and sustainable yield, which involve, among other things,
uncertainties inherent in business, inventory estimation and
harvest scheduling. These forward-looking statements are identified
by the use of words such as “may,” “will,” “should,” “expect,”
“estimate,” “believe,” “intend,” “project,” “anticipate” and other
similar language. However, the absence of these or similar words or
expressions does not mean that a statement is not forward-looking.
While management believes that these forward-looking statements are
reasonable when made, forward-looking statements are not guarantees
of future performance or events and undue reliance should not be
placed on these statements. The reader is cautioned not to rely on
these forward-looking statements. If underlying assumptions prove
inaccurate or known or unknown risks or uncertainties materialize,
actual results could be vary materially from the expectations and
projections of Rayonier. Risks and uncertainties include
anticipated financial outcomes, business and market conditions,
outlook, expected dividend rate and the implementation of the
company’s business strategies and other similar outcomes relating
to the company’s future events, developments or financial or
operational performance or results. For additional factors that
could impact future results, please see Item 1A — Risk Factors in
the company’s most recent Annual Report on Form 10-K and similar
discussions included in other reports that we subsequently file
with the Securities and Exchange Commission (the “SEC”).
Forward-looking statements are only as of the date they are made,
and the Company undertakes no duty to update its forward- looking
statements except as required by law. You are advised, however, to
review any further disclosures we make on related subjects in our
subsequent reports filed with the SEC.
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version on businesswire.com: http://www.businesswire.com/news/home/20160502006155/en/
Rayonier Inc.InvestorsMark McHugh, 904-357-3757orMediaRoseann
Wentworth, 904-357-9185roseann.wentworth@rayonier.com
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