Potlatch Corporation and\u00a0Deltic Timber Corporation today announced that they have entered into a definitive agreement to combine in an all-stock transaction and create a leading domestic timberland owner and top-tier lumber manufacturer. The combined company will be named\u00a0PotlatchDeltic Corporation\u00a0and its shares will trade on the\u00a0Nasdaq Stock Market\u00a0under the ticker PCH.<\/p>\n
Based on the closing stock prices of Potlatch and Deltic on\u00a0October 20, 2017, the combined company is expected to have a pro forma equity market capitalization of approximately\u00a0$3.3 billion\u00a0and a total enterprise value of more than\u00a0$4.0 billion, including approximately\u00a0$700 million\u00a0in net debt. Following completion of the transaction, the combined company will have more than 1,500 employees serving over 200 customers through operations across its extensive timberland and lumber manufacturing portfolio.<\/p>\n
Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of both companies, Deltic stockholders will receive 1.80 common shares of Potlatch stock for each common share of Deltic that they own. Following the close of the transaction, Potlatch stockholders will own approximately 65% of the combined company, and Deltic stockholders will own approximately 35% on a fully diluted basis.<\/p>\n
The agreement also provides for Deltic to convert to a REIT structure, effective at the closing date of the transaction, ensuring the combined company achieves the most efficient tax structure. As part of the REIT conversion process, Deltic\u2019s accumulated earnings and profits, which are estimated to be approximately\u00a0$250 million, will be distributed to stockholders of the combined company through a dividend consisting of 80% stock and 20% cash by the end of 2018.<\/p>\n
The combination brings together two leading timberland owners and lumber manufacturers. Together, the combined company will have a highly productive and diverse timberland portfolio of approximately 2 million acres, with approximately 1.1 million acres in the U.S. South, 600,000 acres in\u00a0Idaho, and 150,000 acres in\u00a0Minnesota. In addition, upon completion of the transaction, the company will operate eight wood products manufacturing facilities, including six lumber manufacturing facilities, one medium density fiberboard facility and one industrial plywood mill. In total, the combined company will have lumber capacity of 1.2 billion board feet, making it one of the leading producers in the U.S. Furthermore, the company\u2019s lumber capacity will be heavily weighted towards high-margin southern yellow pine lumber, with over half of the company\u2019s capacity being produced at its three southern mills. The transaction also combines two highly complementary and successful real estate businesses.<\/p>","protected":false},"excerpt":{"rendered":"
Potlatch Corporation and\u00a0Deltic Timber Corporation today announced that they have entered into a definitive agreement to combine in an all-stock transaction and create a leading domestic timberland owner and top-tier lumber manufacturer. The combined company will be named\u00a0PotlatchDeltic Corporation\u00a0and its … Continue reading