Rayonier Inc. completed the acquisitions of high-quality commercial timberlands located in Texas, Georgia, Alabama, and Louisiana from Manulife Investment Management for an aggregate purchase price of approximately $454 million, after customary purchase price adjustments at closing.
The acquisitions comprise approximately 137,800 acres of well-stocked and highly productive timberlands located in some of the strongest timber markets in the U.S. South. All of the acquired acreage consists of fee ownership. Rayonier no longer anticipates acquiring the approximately 34,500-acre long-term lease located in Georgia, as the seller and Rayonier mutually agreed to extract this portion of the property from the transaction in order to achieve the seller’s objective of closing by year end. As a result, Rayonier now expects the acquisitions to contribute an average annual harvest volume of approximately 725,000 tons and an average annual adjusted EBITDA contribution from timberland operations of approximately $23 million over the next 10 years.
Rayonier financed the acquisitions with cash on hand and proceeds from incremental borrowings through the Farm Credit System. Borrowing rates on the new, five-year $250 million term loan are variable. The company has entered into an interest rate swap agreement to fix $100 million of the new term loan at an all-in effective cost of approximately 4.6%, net of estimated patronage refunds. Rayonier is a leading timberland real estate investment trust with assets located in some of the most productive softwood timber growing regions in the United States and New Zealand.