Plum Creek Timber Company, Inc. to Acquire Southern Timberlands and Interest
in South Carolina Development Lands
SEATTLE -- October 28, 2013
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
*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.
Following the completion of the transaction, the timber harvest from the
acquired lands is expected to average nearly 3 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.
Upon completion of the transaction, through a 50/50 joint venture formed by
Plum Creek and MeadWestvaco, the companies plan to pursue an entitlement and
development strategy for 87,000 acres of high-value lands over the next
several years in the Charleston, S.C., market. In addition, Plum Creek will
hold a 5 percent interest (valued at $12.5 million) in approximately 22,000
acres of residential, commercial and industrial properties that are actively
being developed in the same market.
Plum Creek expects to use a combination of equity and debt to finance the
acquisition, consistent with Plum Creek’s current credit profile and capital
Webcast Conference Call and Supplemental Information
Plum Creek will hold a conference call today, Oct. 28, at 6:00 p.m. ET (3:00
p.m. PT) to discuss its third quarter earnings and this transaction. To access
the live webcast and its supporting presentation material visit Plum Creek’s
website at www.plumcreek.com and click on the “Investors” link.
Investors without Internet access should dial 1-800-572-9852 at least 10
minutes prior to the start of the call, referencing Plum Creek’s conference
call. Those wishing to access the call from outside the United States and
Canada should dial 1-706-645-9676, also referencing Plum Creek’s conference
call. Replay of the call will be available for 48 hours after completion of
the live call and can be accessed at 1-855-859-2056 or 1-404-537-3406
(international calls), using the code 31587216.
Plum Creek is among the largest and most geographically diverse private
landowners in the nation with approximately 6.3million acres of timberlands
in major timber producing regions of the United States and wood products
manufacturing facilities in the Northwest. For more information, visit
This press release contains forward-looking statements within the meaning of
the Private Securities 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 “believes,” “expects,” “may,” “will,” “should,”
“seek,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates,” or
the negative of those words or other comparable terminology. The accuracy of
such statements is subject to a number of risks, uncertainties and assumptions
including, but not limited to, the completion of the transaction in the time
frame, on the terms and in the manner currently anticipated, the cyclical
nature of the forest products industry, our ability to harvest our timber, our
ability to execute our acquisition strategy, the market for and our ability to
sell or exchange non-strategic timberlands and timberland properties that have
higher and better uses, and various regulatory constraints. These and other
risks, uncertainties and assumptions are detailed from time to time in our
filings with the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended, and the Securities Act of 1933, as amended.
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.
Plum Creek Timber Company, Inc.
John Hobbs, 1-800-858-5347
Kathy Budinick, 1-888-467-3751
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