PotlatchDeltic acquiring CatchMark Timber Trust
PotlatchDeltic Corporation and CatchMark Timber Trust, Inc. have entered into a definitive agreement to combine in an all-stock transaction.
In a joint release issued by the companies, PotlatchDeltic said the move will strengthen and diversify its position as an integrated timber real estate investment trust (REIT).
The deal calls for CatchMark stockholders to receive 0.23 common shares of PotlatchDeltic stock for each common share of CatchMark that they own. PotlatchDeltic is paying a price per share of $12.88 for each common share of CatchMark, which is a 55% premium to CatchMark’s common share price as of the close of business on May 27.
The combined company is expected to have a pro forma market capitalization of over $4 billion and total enterprise value of more than $5 billion, including $557 million in net debt.
Combining the two timberland REITs results in PotlatchDeltic owning approximately 2.2 million acres of diversified timberlands including 626,000 acres in Idaho and over 1.5 million acres in the South.
“With CatchMark, we gain significant scale in three states and diversify our timberland holdings into some of the strongest markets in the U.S. South,” said Eric Cremers, president and CEO of PotlatchDeltic. “In addition, the location of CatchMark’s land near large population centers provides attractive rural real estate sales opportunities.”
PotlatchDeltic also noted that it remains the timber REIT with the most leverage to lumber prices, including 1.1 billion board feet of lumber capacity.
“By joining together our high-quality assets and our dedicated and talented employees, we will greatly enhance the potential of PotlatchDeltic,” said Brian Davis, president and CEO of CatchMark. “We look forward to working together as we integrate our two companies and capitalize on the robust opportunities for growth and success.”
The combination adds approximately 350,000 acres of timberlands in Alabama, South Carolina, and Georgia to Potlatch Deltic’s holdings. CatchMark’s timberlands are in some of the strongest markets in the U.S. South with a deep base of well-capitalized customers, PotlatchDeltic said.
The transaction is expected to close in the second half of 2022. The transaction requires the approval of CatchMark stockholders and is subject to the satisfaction of customary closing conditions and regulatory approvals.
Due to the transaction, CatchMark has postponed its 2022 annual meeting of stockholders that had been scheduled for June 14.
If approved by stockholders, PotlatchDeltic stockholders will own approximately 86% of the combined company, and CatchMark stockholders will own approximately 14% on a fully diluted basis.
The Board of Directors of the new, combined company will consist of nine Directors from PotlatchDeltic and one Director from CatchMark. The corporate headquarters will be maintained in Spokane, Wash with a regional office in Atlanta, Ga.
BofA Securities, Inc. is serving as exclusive financial advisor and Perkins Coie LLP is serving as legal advisor to PotlatchDeltic. Stifel, Nicolaus & Company, Inc. is serving as exclusive financial advisor and King & Spalding LLP is serving as legal advisor to CatchMark.
PotlatchDeltic currently owns approximately 1.8 million acres of timberlands in Alabama, Arkansas, Idaho, Louisiana, Minnesota, and Mississippi.
Through its REIT subsidiary, PotlatchDeltc also operates six sawmills, an industrial-grade plywood mill, a residential and commercial real estate development business, and a rural timberland sales program.