August 16, 2021

By Lynda Kiernan-Stone, Global AgInvesting Media

U.S. timberland investor CatchMark has agreed to sell 18,063 acres of prime timberland in Oregon, known as the Bandon property, to Roseburg Resources via a $100 million cash deal. 

Founded in 2007 and headquartered in Atlanta, CatchMark focuses exclusively on timberland investments and management. With a goal of maximizing cash flows across business cycles, the firm strategically harvests high-value timberlands proximal to mill markets, providing merchantable inventory while generating double-digit revenue growth.

Today, CatchMark owns interest in 1.5 million acres of timberland (as of June 30, 20021) across Alabama, Georgia, Oregon, South Carolina, and Texas. 

On a per-acre basis, this deal reflects an agreement at $5, 536 per acre. CatchMark originally acquired the property in August 2018 for $88.8 million, or $4,916 per acre, posting a gain of $23 million for the asset.

The company stated that it has harvested approximately 80 percent of its targeted full-year volume for 2021 from the Bandon property by the close of the transaction, and has increased its guidance for full-year net income to a range of $13 million to $17 million to reflect this sale. No other adjustments to guidance have been made, however.

“Coming off an exceptionally strong second quarter when we generated record revenues, cash from operations, and adjusted EBITDA and our second highest quarter of net income, this disposition demonstrates our ability to execute accretive capital recycling transactions and further strengthens CatchMark’s capital position,” said Brian Davis, CEO, CatchMark.

Davis went on to explain that the divestment of Bandon allows the company to concentrate its focus on its significant holdings platform in the U.S. south where it expects to see its greatest opportunity for growth, adding that the proceeds from the sale will be used to pay down existing debt.

“Our simple strategy remains focused on investing in prime timberlands in the nation’s leading mill markets,” said Davis, “employing delivered wood sales as well as opportunistic stumpage sales to provide predictable and stable cash flow, help cover our dividend, and create long-term shareholder value.”

Hot Spot  – Pacific Northwest 

Timber deals have been abounding in the U.S. Pacific Northwest region recently. This deal announced by CatchMark is the third shared by GAI News happening in the geographic location in about a month.

In late July, Global investment manager New Forests acquired 156,000 acres of forest land in the Hilt-Siskiyou Forest – a mixed conifer forest along the border of California and Oregon – from Fruit Growers Supply Company (FGS), alongside an institutional investor client. 

As a certified B corporation operating in Australia, New Zealand, Southeast Asia, and the U.S., New Forests has a mission to see the forest sector take its place in the transition to a sustainable future.

In the U.S. market, the group’s investment strategy is to acquire and manage forestry assets for sustainable timber production, environmental market exposures, and conservation in order to generate higher returns compared to strictly timber-only management, to drive the mitigation of climate change, and to foster positive social impacts.

Over the next 24 months, the inventor plans to deploy at least $500 million in U.S. forests for multiple clients, and is also actively considering additional investment in the Pacific Northwest, Lake States, New England, and Appalachia.

Almost concurrently, BTG Pactual Timber Investment Group (TIG) acquired the management of two timber funds, (Fund III and Fund IV), with a co-investment interest in both vehicles from Olympic Resource Management (ORM), a subsidiary of Rayonier Inc., for an aggregate sum of $35.9 million. 

This deal sees TIG acquire approximately 110,000 acres of high-quality, diverse, SFI-certified timberland in the Pacific Northwest region of the U.S., with Rayonier’s ownership stake in the two funds on a “look through” basis equaling about 11,000 acres.

It is not surprising that investors are pursuing such deals. The forest products industry in the Pacific Northwest weathered COVID-19 and the shutdowns that ensued rather well, according to Forest2Market. Strong demand for wood products (especially tissue products earlier in the year and lumber later in the year) remained steady throughout 2020. 

And despite keeping one eye on the catastrophic wildfires in that area of the country, Forest2Market noted continued, but guarded optimism for the Pacific Northwest industry this year.

– Lynda Kiernan-Stone is editor 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 Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.