Transactions - MAY 15, 2018

CatchMark partnership buys East Texas timberlands for $1.39b

by Jody Barhanovich

CatchMark Timber Trust, Inc., has agreed to acquire 1.1 million acres of East Texas timberlands for approximately $1.39 billion in a joint venture with a consortium of institutional investors, including BTG Pactual Timberland Investment Group, Highland Capital Management, Medley Management Inc., and a major Canadian institutional investor.

The property is being sold by Campbell Global, on behalf of the institutional owners of the property, in a transaction expected to be completed within 45 to 60 days, subject to customary closing conditions.
For an investment of up to $227.5 million, CatchMark will more than triple the number of acres under its control and management to approximately 1.6 million acres. This innovative transaction fits CatchMark’s profile for acquiring interests in properties that can provide durable growth for its stockholders:

  • The highly productive timberlands have an attractive site index and feature a rapidly accelerating inventory profile, projected to grow from the current 2.8 million tons of annual harvest volume to more than 5 million tons by 2028.
  • The joint venture will assume existing long-term sawtimber and pulpwood supply agreements with Georgia-Pacific and International Paper, which run through 2029 and 2027, respectively. International Paper has an option to extend its agreement until 2032.
  • The timberlands are located near top-quartile mills and within approximately 100 miles of three of the top five U.S. homebuilding markets: Austin, Dallas and Houston. These markets provide strong, growing and compelling demand fundamentals.

The acquisition is one of the largest U.S. timberland transactions since the 2007 sale of 1.55 million acres (including this asset together with other timberlands in Louisiana, Alabama and Georgia) by Temple-Inland to the current owner for $2.4 billion, the sale of TimberStar properties in 2008 for $1.9 billion, and the sale of 1.88 million acres by Forest Capital Partners in 2012 for an undisclosed price.


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