By Barbra Murray, Contributing Editor
Federal Way, Wash.—Weyerhaeuser Co. has wrapped up its acquisition of Plum Creek Timber Co. Inc. and emerged from the deal as a $23 billion timber REIT with more than 13 million acres of diverse, productive forests, 38 wood products manufacturing facilities and the distinction of being the largest private ownership of timberland in the U.S.
“In the coming months, we will be relentlessly focused on creating value for our shareholders by capturing cost synergies, leveraging our scale, sharing best practices, delivering the most value from every acre and driving operational excellence,” Doyle Simons, president & CEO of Weyerhaeuser, said in a prepared statement.
Per terms of the merger agreement, Plum Creek shareholders received 1.6 shares of Weyerhaeuser common stock for each share of Plum Creek common stock. Additionally, concurrent with the closing, Weyerhaeuser paid off outstanding amounts under Plum Creek’s $225 million term loan and paid down the REIT’s $500 million revolving credit line. The agreement also calls for Weyerhaeuser to execute a post-closing repurchase of shares valued at $2.5 billion.
Ratings agencies are giving the deal the thumbs-up. “We believe the consolidation will enable Weyerhaeuser to leverage benefits from the improving housing market in the U.S. as well as develop and offer better products and services to its customers,” Zacks Equity Research noted on its analyst blog. And Moody’s Investors Service affirmed the REIT’s Baa2 senior unsecured rating.
Weyerhaeuser will continue to be headquartered in Federal Way, Wash.; however, that address is temporary. Weyerhaeuser announced in 2014 that it would relocate to neighboring Seattle, which happens to be where Plum Creek had maintained its corporate operations. The new 165,000-square-foot, build-to-suit headquarters building at 200 Occidental Ave. S., will be ready for occupancy midyear.
Image courtesy of Mithun