Plum Creek Timber Company, Inc. (NYSE: PCL) today announced it has signed a $1.1 billion purchase and sale agreement to acquire approximately 501,000 acres of industrial timberlands, associated wind and mineral assets, and an interest in approximately 109,000 acres of high-value rural and development-quality lands from MeadWestvaco Corporation (NYSE:MWV). The transaction is subject to the satisfaction of usual and customary closing conditions and is expected to close during the fourth quarter of 2013.
Specifically, Plum Creek has agreed to acquire:
- 501,000 acres of industrial timberlands in Alabama, Georgia, South Carolina, Virginia, and West Virginia for $869 million;
- 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;
- Subsurface rights, mineral rights and wind power assets associated with the timberlands 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. It also expands our portfolios of high-value rural land and non-timber resources,” said Rick Holley, chief executive officer. “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. The West Virginia timberlands are contiguous with our high-value hardwood lands in the state.”
“The joint-venture interests in high-value rural and development-quality lands are a good fit for Plum Creek, due to our experience in capturing value from these types of properties. Similarly, the mineral and wind power assets are familiar asset types.”At closing, Plum Creek will pay the seller $226 million in cash and issue an $860 million ten-year installment note for the assets.