December 11, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Started in 1900, Weyerhaeuser Company is a real estate investment trust (REIT) and one of the largest private owners of timberland in the world, controlling about 11 million acres in the U.S. and managing additional timber assets under long-term licenses in Canada. It also is one of the largest manufacturers of wood products in North America with a global workforce of 9,200, generating $10.2 billion in net sales in 2022. 

Recently the company announced it had signed two distinct agreements with Forest Investment Associates – one to divest 69,600 acres in Upstate South Carolina for $170 million, and the second, to purchase approximately 60,700 acres of high-quality timberland in Coastal North Carolina, South Carolina, and Mississippi for $163 million. 

“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 CEO, Weyerhaeuser Company. 

“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.”

Through this transaction, Weyerhaeuser numerated multiple benefits:

~ The company will gain mature, highly productive acreage that is easily integrated with its existing assets and milling operations.

~ A fee ownership with 80 percent planted pine acreage and strong site productivity, delivering strong long-term returns. 

~ A well-stocked timber inventory producing attractive sawlog mix and an expected average harvest of 6.9 tons per acre, or 420,000 tons per year over the first five years. 

~ An expected average EBITDA from timber operations of approximately $130 per acre, or $7.7 million per year over the first five years. 

~ An opportunity to enhance real estate cash flows and returns on high-operationality coastal assets.

~ And a deal structured as a tax-efficient, like-kind exchange with minimal transaction costs. 

Upon the completion of these two deals, which are expected to close by the end of 2023, Weyerhaeuser will own or manage more than 870,000 acres of timberlands in the states of North and South Carolina, and approximately 1.19 million acres in Mississippi. Additionally, across the geography of these three states, the company owns significant operations and infrastructure including seven mills, two distribution centers, two tree nurseries, and multiple mitigation banks and real estate developments. 

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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