S.C. company strikes $275M land deal
2009/03/03, 3:45 pm
Filed under: 1 | Tags: , , ,
Tuesday, 03 March 2009
SCBIZ Daily Staff

COLUMBIA – American Timberlands Co. has agreed to purchase 114,000 acres of properties in the Southeast from International Paper for $220 million. American Timberlands, a land investment management firm based in Columbia, will also give International Paper a 20% interest in the company in exchange for 29,000 additional acres, valued at $55 million.

The transaction value is subject to various adjustments at closing and is contingent upon the American Timberlands partnership raising enough money to finance the transaction. The transaction is expected to close in mid-June. The location of the properties has not been disclosed.

“This was an attractive opportunity, and we intend to use the proceeds received at closing to pay down debt,” said John Faraci, International Paper’s chairman and CEO. “This is consistent with our commitment to strengthening our balance sheet and maintaining our financial flexibility.”

American Timberlands, in partnership with Atlanta-based Private Equity Fund, last June purchased 20,000 acres of land in Horry County from International Paper, according to a company statement.

International Paper’s latest dealing with American Timberlands comes on the heels of the Memphis-based paper company’s year-end financial statement, in which preliminary full-year net earnings totaled $57 million in 2008. In 2007, International Paper posted net earnings of $1.2 billion.

In an effort to save cash and pay down debt, International Paper recently announced it would reduce capital investment, decrease overhead spending and headcount, and freeze salaries. To this end, the company said in January it would close a mill in Scotland by the end of March. It also announced Monday that it would reduce the company’s quarterly common stock dividend from 25 cents a share to 2 ½ cents a share, effective for the dividend payable June 15, 2009. This move will save the company an estimated $100 million in cash each quarter.

International Paper’s Web site says the company was formed in 1898 and is one of the world’s leading names in paper and packaging. It has operations in the U.S., Europe, Latin America, Asia/Pacific and Canada. Among other operations, the Web site says the company operates eight market and fluff pulp mills scattered around the globe, including two in South Carolina in Eastover in Georgetown.

Published March 3, 2009

7 Comments so far
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[…] Original post by mhanna43 […]

Pingback by S.C. company strikes $275M land deal · Invest-In-Real-Estate.ExplainedOnline.Net

[…] Original post by mhanna43 […]

Pingback by S.C. company strikes $275M land deal · Real-Estate-Investing.ExplainedOnline.Net

Interesting to see that American International Paper will received 20% of the value of American Timberland by giving them the additional 29,000 acres.

Is this developable land or a resource based transaction?

Comment by Adams

Here is a little more information for you:
International Paper (NYSE: IP) said today that it plans to sell about 143,000 acres in the Southeast, including land in two local developments — 11,000 acres in The Highlands of Spanish Fort and the 5,600-acre Roan’s Creek in Loxley.

IP said it plans to sell 114,000 acres to American Timberlands Fund I LP for $220 million cash and would contribute 29,000 acres, worth $55 million, in exchange for a 20 percent interest in the American Timberlands partnership.

The transaction is valued at about $275 million.

The sale is contingent upon the partnership raising $220 million to finance the transaction, according to Kathleen Bark, a senior manager at IP’s headquarters in Memphis, Tenn.

The proceeds from the sale will be used to pay down debt, according to John Faraci, IP’s chairman and chief executive officer.

IP today also cut its regularly quarterly dividend by 90 percent to 2.5 cents per share in another effort to conserve cash. The dividend is payable June 15 to shareholders of record as of May 18.

The Highlands and Roan’s Creek are two of five master-planned communities that IP plans to sell, Bark said. The others are in Georgia, Savannah and Brunswick, and Myrtle Beach, S.C.

The Highlands property extends from Jimmy Faulkner Road north of U.S. 31 to Bromley Road and north toward Bay Minette. The Highlands has been approved as planned unit development, or PUD.

Fairhope builder Jeff Thompson has seven houses under way in the 250-lot Stone Brook off Jimmy Faulkner Road, the first of 26 subdivisions planned for The Highlands. Thompson said Monday that he was not aware of IP’s plans to sell the development, but said it should not affect his project.

Roan’s Creek was in the planning stages and situated between Alabama 59 and Steelwood Lake.

American Timberlands Co. is a land investment management firm based in Columbia, S.C.

Comment by mhanna43

[…] Original post by mhanna43 […]

Pingback by S.C. company strikes $275M land deal · Real-Estate.ExplainedOnline.Net

I just stopped by your blog and thought I would say hello. I like your site design. Looking forward to reading more down the road.

Comment by Bill Cash

Thanks Bill. Please spread the word to individuals in the industry or interested in business dealings in general and I will do the same

Comment by mhanna43

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