Purchase and sale agreements with Forest Investment Associates
set to increase cash flow and optimize portfolio value
SEATTLE, Nov. 30,
2023 /PRNewswire/ -- Weyerhaeuser
Company (NYSE: WY) today announced it has entered into two
distinct agreements with Forest Investment Associates to divest
approximately 69,600 acres in Upstate South Carolina for
$170 million, and to purchase
approximately 60,700 acres of high-quality timberlands in Coastal
North Carolina, South Carolina and
Mississippi for $163 million.
Key attributes of the transaction:
- Adding high-quality timberlands with attractive timber
attributes, including:
-
- Mature, highly productive acreage that is well-integrated with
existing Weyerhaeuser timberlands and mill operations.
- Fee ownership with 80 percent planted pine acreage and strong
site productivity, delivering strong long-term timber returns.
- Well-stocked timber inventory producing attractive sawlog mix
and expected average harvest of 6.9 tons per acre (or 420,000 tons)
annually over the first five years.
- Expected average Adjusted EBITDA from timber operations of
approximately $130 per acre (or
$7.7 million) annually over the first
five years.
- Acquiring core timberland acreage at an Adjusted EBITDA
multiple of 21x1, while divesting less strategic
ownership at an Adjusted EBITDA multiple of 47x1.
- Opportunity to enhance real estate cash flows and returns on
high-optionality coastal assets.
- Structured as a tax-efficient like-kind exchange with minimal
transaction costs.
1)
|
Adjusted EBITDA multiple calculated as purchase price
divided by Weyerhaeuser's forecasted 5-year annual average Adjusted
EBITDA from timber operations.
|
"This transaction represents a unique opportunity to further
optimize Weyerhaeuser's Southern Timberlands portfolio with
high-quality, highly productive acreage that is well-integrated
with our existing operations," said Devin W. Stockfish, president
and chief executive officer. "As we've demonstrated over the last
several years, we are committed to active portfolio management
across our unmatched timber holdings, and we remain focused on
transactions that improve our cash flow and returns while creating
long-term value for our shareholders."
With this transaction, Weyerhaeuser will own or manage more than
870,000 acres of timberlands in North and South Carolina and approximately 1,190,000 in
Mississippi. The company employs
more than 1,300 people and has significant operations and
infrastructure across the three states, including seven mills, two
distribution centers, two tree nurseries and multiple mitigation
banks and real estate development projects. The transaction is
subject to customary closing conditions and is expected to close in
the fourth quarter of 2023.
ABOUT WEYERHAEUSER
Weyerhaeuser Company, one of the
world's largest private owners of timberlands, began
operations in 1900. We own or control approximately 11 million
acres of timberlands in the U.S. and manage additional timberlands
under long-term licenses in Canada. We manage these timberlands on
a sustainable basis in compliance with internationally
recognized forestry standards. We are also one of the largest
manufacturers of wood products in North America. Our company is a real estate
investment trust. In 2022, we generated $10.2 billion in net sales and employed
approximately 9,200 people who serve customers worldwide. Our
common stock trades on the New York Stock Exchange under the symbol
WY. Learn more at www.weyerhaeuser.com.
NON-GAAP FINANCIAL MEASURES
This news release references forward-looking estimates of Adjusted
EBITDA, which is a non-GAAP measure that management uses to
evaluate the performance of the company. Adjusted EBITDA, as we
define it, is operating income adjusted for depreciation,
depletion, amortization, basis of real estate sold and special
items. Adjusted EBITDA should not be considered in isolation from,
and is not intended to represent an alternative to, our GAAP
results. We have not provided a reconciliation of this
forward-looking non-GAAP financial measure to the most comparable
GAAP measure of net income because Adjusted EBITDA, as we define
it, excludes the impact of certain items listed above in our
definition of Adjusted EBITDA, and management cannot estimate these
items or the impact they will have on Adjusted EBITDA on a
forward-looking basis without unreasonable effort. As a result,
investors may be unable to accurately compare the expected impact
of the acquisition to our historical results or the results or
expected results of other companies that may have treated such
matters differently. Nonetheless, management believes that
providing this forward-looking non-GAAP information about the
acquisition is useful to investors, and given the uncertain nature
of forward-looking statements, we believe investors are able to
take into account the inherent limitations of this forward-looking
non-GAAP information. We cannot predict the occurrence, timing or
amount of any of the items that we exclude from our Adjusted EBITDA
estimate. Accordingly, the actual effect of these items, when
determined, could potentially be significant to the calculation of
Adjusted EBITDA and actual results may differ materially from our
estimate.
FORWARD-LOOKING STATEMENTS
This news release contains
statements that are forward-looking within the meaning of the
Private Securities Litigation Reform Act of 1995 including, without
limitation, with respect to the company's expectations concerning
the occurrence, timing, taxation, operational benefits and expected
financial contributions and benefits of its acquisition of certain
North Carolina, South Carolina and Mississippi timberlands and its disposition of
certain South Carolina
timberlands. Forward-looking statements may be identified by the
fact that they do not relate strictly to historical or current
facts, by references to expected performance over a period of time
or by the use of certain words such as "committed," "expected,"
"opportunity," "will" and similar words. Forward-looking statements
are based on our current expectations and assumptions and are not
guarantees of future events or performance. The realization of our
expectations and the accuracy of our assumptions are subject to a
number of risks and uncertainties that could cause actual results
to differ materially from those described in the forward-looking
statements. These risks and uncertainties include, but are not
limited to, those identified in our 2022 Annual Report on Form
10-K, as well as those set forth from time to time in our other
public statements, reports, registration statements, prospectuses,
information statements and other filings with the SEC. We may not
be able to complete the transactions referenced herein within the
stated time period, or at all, because of a number of factors,
including without limitation the occurrence of any event, change or
other circumstances that could give rise to a termination, or the
failure by either party to satisfy other closing conditions, under
the relevant transaction documents. There is no guarantee that any
of the events anticipated by these forward-looking statements will
occur, and if they do occur, there is no guarantee what effect they
will have on the company's business, results of operations, cash
flows, financial condition and future prospects. The company
undertakes no obligation to update these forward-looking statements
after the date of this news release.
For more information contact:
Analysts –
Andy Taylor, 206-539-3907
Media – Nancy Thompson,
919-861-0342
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SOURCE Weyerhaeuser Company