US land resources firms Rayonier and PotlatchDeltic have agreed an all-share merger to create a $7.1bn (€6.1bn) company specialising in land ownership and lumber manufacturing.
As part of the agreement, shareholders of Rayonier will receive a 54% stake in the newly formed company, alongside a 46% stake held by shareholders of PotlatchDeltic.
The combined company is expected to have a pro forma equity market capitalisation of $7.1bn and a total enterprise value of $8.2bn, including $1.1bn of net debt.
NYSE-listed Rayonier is a US timberland real estate investment trust (REIT) with assets located in some of the most productive softwood timber growing regions in the country. As of 30 June this year, Rayonier owned or leased under long-term agreements approximately 2m acres of timberlands located in the US South and US Pacific Northwest.
The company also operates six sawmills, an industrial-grade plywood mill, a residential and commercial real estate development business and a rural timberland sales programme.
Fellow REIT PotlatchDeltic owns 2.1m acres of timberlands in Alabama, Arkansas, Georgia, Idaho, Louisiana, Mississippi and South Carolina.
Once the deal is completed, the combined company, which will operate under a new name to be announced later, will become the second-largest publicly traded timber and wood products company in North America.
Mark McHugh, president and CEO of Rayonier, said: “Rayonier and PotlatchDeltic share a commitment to sustainability and a legacy of excellence in delivering land resources to their highest and best use. We look forward to completing the transaction and we are confident that the merger will generate meaningful value creation.”
Eric Cremers, president and CEO of Nasdaq-listed PotlatchDeltic, said: “This merger is a watershed moment for both companies. Our complementary assets and shared vision will unlock opportunities to create significant strategic and financial benefits beyond what could be achieved by either company independently.”
McHugh will continue to serve as president and CEO as well as a member of the board of directors of the combined company. In addition, Wayne Wasechek, currently CFO of PotlatchDeltic, will serve as CFO of the combined company; Rhett Rogers, currently SVP, portfolio management of Rayonier, will serve as EVP, land resources; and Ashlee Cribb, currently VP, wood products of PotlatchDeltic, will serve as EVP, wood products.
Cremers will be the executive chair of the board of directors of the combined company for 24 months after closing.
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