Plum Creek Timber buying 501,000 acres in Southeast; 36,000 in Georgia
By Maria Saporta
Plum Creek Timber Co. is adding to its land holdings in the Southeast including 36,000 acres in Georgia.
On Monday Oct. 28, Plum Creek announced that it had signed a $1.1 billion purchase and sale agreement to acquire about 501,000 acres of industrial timberlands, associated wind and mineral assets, and an interest in about 109,000 acres of high-value rural and development-quality lands from MeadWestvaco Corp.
The transaction is expected to close during the fourth quarter of 2013 and it is still subject to customary closing conditions.
The acquisition included 501,000 acres of industrial timberlands in Alabama, Georgia, South Carolina, Virginia and West Virginia for $869 million.
It also included an investment in joint ventures consisting of 109,000 acres of high value rural lands and development-quality lands near Charleston, S.C. for $152 million.
Also, subsurface rights, mineral rights and wind power assets associated with the timberlands were acquired for $65 million.
“This transaction adds significant assets to our existing timber resource base and is expected to be cash flow accretive in the first 12 months,” said Rick Holley, Plum Creek’s chief executive officer. “It also expands our portfolios of high-value rural land and non-timber resources.”
Holley added that “these timberlands have a long history of excellent forest management. The high stocking levels and older age of the timberlands make them particularly attractive. These assets should integrate seamlessly into our existing timberland ownership in the Southeast and add to our presence in key markets.”
At closing, Plum Creek will pay the seller $226 million in cash and issue an $860 million 10-year installment note for the assets.
Following the completion of the transaction, the timber harvest from the acquired lands is expected to average nearly three million tons annually over the next 10 years, growing Plum Creek’s total annual harvest more than 15 percent from recent levels.
The mineral and wind assets associated with the timberlands are expected to generate approximately $6 million of annual cash flow, assuming current commodity prices.