Combined Company Will Have Approximately 2.2
Million Acres of Diversified High-Quality Timberlands
Will Remain the Timber REIT with the Most
Leverage to Lumber Prices
Creates Opportunities to Leverage Attractive
Real Estate Portfolio
Compelling Synergies Expected to Drive
Approximately $16 Million Increase in Pro Forma Cash Available for
Distribution by End of First Year
Transaction Expected to Close in Second Half of
2022
Companies to Host Conference Call and Webcast
Today at 5:30 a.m. Pacific Time / 8:30 a.m. Eastern Time
PotlatchDeltic Corporation (Nasdaq: PCH) (“PotlatchDeltic”) and
CatchMark Timber Trust, Inc. (NYSE: CTT) (“CatchMark”) today
announced that they have entered into a definitive agreement to
combine in an all-stock transaction. The acquisition by
PotlatchDeltic will strengthen and diversify a leading integrated
timber REIT and continue to enhance shareholder value.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220531005306/en/
Based on the closing stock prices of PotlatchDeltic and
CatchMark on May 27, 2022, the combined company is expected to have
a pro forma market capitalization over $4 billion and total
enterprise value of more than $5 billion, including $557 million in
net debt.
Under the terms of the agreement, which has been unanimously
approved by the Board of Directors of both companies, CatchMark
stockholders will receive 0.23 common shares of PotlatchDeltic
stock for each common share of CatchMark that they own. This
reflects a price per share of $12.88 for each common share of
CatchMark, and a 55% premium to CatchMark’s common share price as
of the close of business on May 27, 2022. Following close of the
transaction, PotlatchDeltic stockholders will own approximately 86%
of the combined company, and CatchMark stockholders will own
approximately 14% on a fully diluted basis.
The combination brings together two high quality timberland
REITs resulting in PotlatchDeltic owning approximately 2.2 million
acres of diversified timberlands including 626,000 acres in Idaho
and over 1.5 million acres in strengthening markets in the U.S.
South. PotlatchDeltic also remains the timber REIT with the most
leverage to lumber prices, including 1.1 billion board feet of
lumber capacity. The transaction also combines two successful and
complementary real estate businesses.
Eric J. Cremers, President and Chief Executive Officer of
PotlatchDeltic, said, “We are excited about growing shareholder
value by combining PotlatchDeltic and CatchMark. 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. In
addition, the location of CatchMark’s land near large population
centers provides attractive rural real estate sales opportunities.
PotlatchDeltic will retain a strong balance sheet and liquidity
after the merger is completed, providing a platform for continued
growth. We also remain committed to responsible environmental,
social, and governance strategies.”
Brian M. Davis, President and Chief Executive Officer of
CatchMark, said, “This partnership with PotlatchDeltic unlocks
value for our stockholders and positions us well for sustainable
success over the long term. By joining together our high quality
assets and our dedicated and talented employees, we will greatly
enhance the potential of PotlatchDeltic. We look forward to working
together as we integrate our two companies and capitalize on the
robust opportunities for growth and success.”
PotlatchDeltic and CatchMark: Leveraging Two Great Timber
REITs
The combination offers significant strategic and financial
opportunities beyond what could be achieved by either company on a
standalone basis, notably through:
- Complementary Timberland Portfolios. The combination
will result in geographic diversity and scale, increasing
PotlatchDeltic’s U.S. South ownership to over 1.5 million acres of
timberland in six states. The transaction adds approximately
350,000 acres of superior site index timberlands in Alabama, South
Carolina, and Georgia. CatchMark’s timberlands are in some of the
strongest markets in the U.S. South with a deep base of well
capitalized customers. PotlatchDeltic and CatchMark share a
dedication to continue managing timberlands sustainably using best
management practices and third-party certification.
- HBU Real Estate Opportunities. The combination will
result in a diverse real estate portfolio with CatchMark’s
timberlands located close to large population centers.
PotlatchDeltic will leverage its rural land sales expertise and
strategy, along with CatchMark’s local market knowledge, to
maximize rural real estate sales opportunities. These opportunities
include potential conservation and solar transactions.
- Compelling Synergies and Accretive to CAD. Cash
Available for Distribution (“CAD”) annual synergies are estimated
to be $16 million, reflecting reduced overhead and the elimination
of public company expenses, insourcing timberland management and
reducing interest expense by refinancing CatchMark’s debt.
PotlatchDeltic expects the run rate synergies to be achieved by the
end of the first full year after the merger closes. PotlatchDeltic
expects the transaction will be accretive to Cash Available for
Distribution (“CAD”) per share in the first full year, excluding
costs to achieve synergies and assuming the full synergies run
rate.
- Meaningful Increase in Stable Cash Flows. EBITDDA
contributed by CatchMark is expected to average $55 million
annually over the first five years, assuming full synergies run
rate.
- Growing Shareholder Value Through Balanced Capital
Allocation. A strong balance sheet, with pro forma combined
Debt to Enterprise Value of approximately 10% will enable
PotlatchDeltic to remain flexible and take advantage of other
capital allocation opportunities. The addition of CatchMark’s cash
flows and CAD synergies provide strong coverage for
PotlatchDeltic’s attractive and growing dividend.
Board Composition and Headquarters
The Board of Directors of the combined company will consist of
nine Directors from PotlatchDeltic and one Director from CatchMark.
The corporate headquarters will be maintained in Spokane,
Washington. A regional office will be maintained in Atlanta,
Georgia.
Timing and Approvals
The transaction is expected to close in the second half of 2022.
The transaction requires approval of stockholders of CatchMark and
is subject to the satisfaction of customary closing conditions and
regulatory approvals. Due to the transaction, CatchMark has
postponed the 2022 annual meeting of its stockholders that had been
scheduled for June 14, 2022.
Advisors
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.
Conference Call Information
A live conference call and webcast will be held Tuesday, May 31,
2022, at 5:30 a.m. Pacific Time (8:30 a.m. Eastern Time). Investors
may access the webcast at www.potlatchdeltic.com by clicking on the
Investors link or by conference call at 1-888-510-2507 for
U.S./Canada and 1-646-960-0351 for international callers.
Participants will be asked to provide conference I.D. number
7281983. Supplemental materials that will be discussed during the
call are available on the website.
A replay of the conference call will be available two hours
following the call until June 9, 2022, by calling 1-800-770-2030
for U.S./Canada or 1-647-362-9199 for international callers.
Callers must enter conference I.D. number 7281983 to access the
replay.
About PotlatchDeltic
PotlatchDeltic (Nasdaq: PCH) is a leading Real Estate Investment
Trust (REIT) that owns approximately 1.8 million acres of
timberlands in Alabama, Arkansas, Idaho, Louisiana, Minnesota and
Mississippi. Through its taxable REIT subsidiary, the company also
operates six sawmills, an industrial-grade plywood mill, a
residential and commercial real estate development business and a
rural timberland sales program. PotlatchDeltic, a leader in
sustainable forest management, is committed to environmental and
social responsibility and to responsible governance. More
information can be found at www.potlatchdeltic.com.
About CatchMark
CatchMark (NYSE: CTT) invests in prime timberlands located in
the nation’s leading mill markets, seeking to capture the highest
value per acre and to generate sustainable yields through
disciplined management and superior stewardship of its exceptional
resources. Headquartered in Atlanta and focused exclusively on
timberland ownership and management, CatchMark began operations in
2007 and owns interests in approximately 350,000 acres of
timberlands located in the U.S. South. For more information visit
www.catchmark.com.
Important Additional Information about the Proposed
Transaction
This communication is being made in respect of the proposed
merger transaction involving PotlatchDeltic Corporation
(“PotlatchDeltic) and CatchMark Timber Trust, Inc. (“CatchMark”).
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of such jurisdiction. In connection with the
proposed transaction, PotlatchDeltic plans to file with the
Securities and Exchange Commission (“SEC”) a Registration Statement
on Form S-4 that constitutes a prospectus of PotlatchDeltic and
will also include a proxy statement of CatchMark. After the
Registration Statement has been declared effective, CatchMark will
mail the definitive proxy statement/prospectus to its stockholders.
The proxy statement/prospectus to be filed with the SEC related
to the proposed merger will contain important information about
PotlatchDeltic, CatchMark, the proposed transaction and related
matters. Investors are urged to carefully read the proxy
statement/prospectus and other documents to be filed with the SEC
(or incorporated by reference into the proxy statement/prospectus)
in connection with the proposed merger, when available.
Investors will be able to obtain free copies of the proxy
statement/prospectus, when it is filed with the SEC, through the
website maintained by the SEC at www.sec.gov. In addition,
investors will be able to obtain free copies of the proxy
statement/prospectus and other documents filed with the SEC by the
parties on PotlatchDeltic’s website at www.potlatchdeltic.com
(which website is not incorporated herein by reference), for
documents filed with the SEC by PotlatchDeltic, or on CatchMark’s
website at www.catchmark.com (which website is not incorporated
herein by reference), for documents filed with the SEC by
CatchMark.
Participants in the Solicitation
PotlatchDeltic and CatchMark and their respective directors and
officers and certain other members of management and employees may
be deemed to be participants in the solicitation of proxies from
stockholders of CatchMark in connection with the merger
transaction. Certain information about the directors and executive
officers of PotlatchDeltic is set forth in its Annual Report on
Form 10-K for the year ended December 31, 2021, which was filed
with the SEC on February 17, 2022, and its proxy statement for its
2022 annual meeting of stockholders, which was filed with the SEC
on March 29, 2022, and will be contained in the proxy
statement/prospectus described above when it is filed with the SEC.
Certain information about the directors and executive officers of
CatchMark is set forth in its Annual Report on Form 10-K for the
year ended December 31, 2021, which was filed with the SEC on March
3, 2022 and its proxy statement for its 2022 annual meeting of
stockholders, which was filed with the SEC on April 15, 2022, and
will be contained in the proxy statement/prospectus described above
when it is filed with the SEC. You can obtain free copies of these
document from PotlatchDeltic and CatchMark using the contact
information above.
Forward-Looking Statements
Statements made in this communication and related statements
that express PotlatchDeltic’s, CatchMark’s or their respective
management’s intentions, hopes, indications, beliefs, expectations,
or predictions of the future constitute forward-looking statements,
as defined by the Private Securities Litigation Reform Act of 1995,
and relate to matters that are not historical facts. These
statements include those regarding the closing of the merger
transaction, the expected timing of the merger transaction and the
potential effects of the merger transaction, including if it does
not close.
These statements are not guarantees of future performance or
events and are subject to risks, uncertainties and assumptions that
could cause actual results or events to vary materially from those
indicated in this communication, including: the inability to obtain
regulatory approvals of the merger transaction on the proposed
terms and schedule; the failure of CatchMark’s stockholders to
approve the merger transaction; disruption to PotlatchDeltic’s or
CatchMark’s business, including customer, employee and supplier
relationships resulting from the merger transaction; the inability
to implement business plans, forecasts, and other expectations
after the completion of the proposed merger transaction, and to
identify and realize synergies or other expected benefits; the
occurrence of any event, change, or other circumstance that could
give rise to a termination of the definitive agreement relating to
the proposed merger transaction; and other factors described in
PotlatchDeltic’s and CatchMark’s reports filed with the SEC,
including their respective annual reports for the year ended
December 31, 2021 and subsequent quarterly reports, which risks and
uncertainties are incorporated herein by reference. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this communication.
Except to the extent required by law, PotlatchDeltic and CatchMark
disclaim any obligation to update any forward-looking statements
after the distribution of this communication, whether as a result
of new information, future events, changes in assumptions, or
otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220531005306/en/
For PotlatchDeltic: (Investors) Jerry Richards
509.835.1521
(Media) Anna Torma 509.835.1558
For CatchMark: (Investors) Ursula Godoy-Arbelaez
855.858.9794
(Media) Mary Beth Ryan (Millar Ryan LLC) 203.268.0158
CatchMark Timber (NYSE:CTT)
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