Plum Creek Timber Company, Inc., (NYSE: PCL) today announced it has entered into an agreement to acquire an interest in approximately 255 million tons of production at four quarries from Vulcan Materials Company (NYSE: VMC) for $154 million. The quarries are located in the metro Atlanta, Ga., market and will continue to be operated by Vulcan. Beginning in October 2013, Plum Creek will receive royalty payments from the production and sale of the crushed stone from the quarries for approximately 25 years.
“This transaction is a unique opportunity for Plum Creek to increase our interest in construction material production in the attractive southeastern markets. These quarries are exceptionally well positioned for the recovery in the infrastructure, industrial and housing sectors in and around Atlanta,” said Rick Holley, chief executive officer of Plum Creek. “We believe we are investing at the right time in the cycle, and the returns and long-term cash flow profile from these assets are compelling.”
“Plum Creek’s unique long term approach to construction materials has allowed us to build a portfolio of owned and acquired assets with excellent return characteristics,” continued Holley. “Over the past several months, institutional investors have expressed interest in investing in similarly positioned construction material assets. We are exploring the potential to pursue strategic partnerships that would allow us to leverage our experience in this area and earn management income, while limiting the total capital investment we make in this area of our business.”
Plum Creek is among the largest and most geographically diverse private landowners in the nation with approximately 6.3 million acres of timberlands in major timber producing regions of the United States and wood products manufacturing facilities in the Northwest. For more information, visit www.plumcreek.com .Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Litigation Reform Act of 1995 as amended. Some of these forward-looking statements can be identified by the use of forward-looking words such as "expects", “will", “approximately”, “believe” and “potential”. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions including, but not limited to, the demand for construction materials, operational risks and the state of the general economy. It is likely that if one or more of the risks materializes, or if one or more assumptions prove to be incorrect, the current expectations of Plum Creek and its management will not be realized. Forward-looking statements are not guarantees of performance, and speak only as of the date made, and neither Plum Creek nor its management undertakes any obligation to update or revise any forward-looking statements.