On June 16, Weyerhaeuser
(WY) made three significant announcements.
Fulton successfully guided Weyerhaeuser
through its REIT conversion.
With the acquisition of 645,000 acres in the Pacific Northwest, Weyerhaeuser
now becomes the largest timber REIT when measured by acreage.
now will own 6.8 million acres to Plum Creek's
6.4 million acres.
Apart from being a major purchase for Weyerhaeuser, the transaction has the potential to increase timberland values for other landowners and investors in the region, said Brooks Mendell, president of Forisk Consulting, which tracks timber finances.
While unlikely to affect log markets on a national scale, the consolidation could be a concern for sawmills in areas where Weyerhaeuser
is the predominant landowner, Mendell said.
At more than $4,000 per acre, the price paid by Weyerhaeuser
would be considered "on the upper end of transactions in the region," according to the Moody's credit rating agency.
Mendell said the price paid by Weyerhaeuser
is justified depending on how much of the timber ready for logging is high in the value chain.
may be evaluating that option partially for financial reasons, given the amount of debt it will be taking on, said Mendell.
said on Sunday that it planned to buy 645,000 acres of timberland for about $2.65 billion and added that it was weighing a sale or spinoff of its home-building unit.
is buying the acreage through its acquisition of Longview Timber
from Brookfield Asset Management, gaining lands in Washington and Oregon.
The deal will expand the company's holdings in the Pacific Northwest by 33 percent, to 2.6 million acres, and increase its overall holdings in the United States to 6.6 million acres.
will pay for the deal by raising about $2.45 billion in debt and equity, including through loans from Morgan Stanley
As part of the deal, Weyerhaeuser
will raise its quarterly dividend to 22 cents a share, from 20 cents a share.
also plans to explore a potential sale of its home-building division, the Weyerhaeuser Real Estate Company
, or Wreco.
"The board of directors and management team are committed to further enhancing value for all Weyerhaeuser shareholders," Daniel S. Fulton, Weyerhaeuser's chief executive, said in a statement.
"This process will help ensure that WRECO
achieves its full potential while we continue to build on Weyerhaeuser's
track record of shareholder value creation."
Tacoma civic and business leader George Weyerhaeuser Jr. dies
Tacoma News Tribune
, April 16, 2013
George Weyerhaeuser Jr., scion of the family that founded the Federal Way-based timber products company that bears his name and a Tacoma civic and business leader in his own right, has died.
suffered a heart attack Sunday evening on his
boat on Commencement Bay.
Family members said they are planning a private service as well as a public memorial.
Arrangements are still pending.
Weyerhaeuser was currently serving as president of the Thea Foss Waterway Development Authority, a board on which he had served for many years.
Meyer served with Weyerhaeuser for a decade when Meyer was executive director of the Foss Waterway Development Authority and Weyerhaeuser was an authority board member.
Meyer said Weyerhaeuser
was a man who combined a passion for civic betterment with a keen business knowledge.
Susan Warner, the museum's executive director, said Weyerhaeuser was one of the founding members of the museum having worked on the museum's board since 1999.
Jim Keller, a former Weyerhaeuser Co. senior executive and a close personnel friend of Weyerhaeuser, said his friend was a people person.
was a person deeply fascinated by science and the arts, he
way upward to one of the timber company's most senior positions, he
was never overtly ambitious, said his
was more interested in what was best for the company, not for George Weyerhaeuser
In a 30-year career at Weyerhaeuser Co., Weyerhaeuser served in several executive positions including vice president for containerboard, vice president of manufacturing for the company's pulp and paper business.
He was president and chief executive officer of Weyerhaeuser Canada from June 1993 to May 1998.
He became the company's senior vice president of technology, procurement and transportation in 1998.
Weyerhaeuser joined the timber products company in Dierks, Ark. in 1978 where he served in various capacities including forester and contract logger administrator before becoming sawmill supervisor in 1980.
represented the company and the timber industry on many boards.
He had served as chairman of the Pulp and Paper Research Institute of Canada and chairman of the the Canadian National Advisory Board on Forestry Research.
During his time heading the company's Canadian operations he was chairman of the Forest Alliance of British Columbia.
In 2006, Weyerhaeuser was appointed to the World Business Council for Sustainable Development as a senior fellow.
The World Business Council for Sustainable Development
is based in Geneva, Switzerland.
served in that position for three years.
He retired from Weyerhaeuser Co. in 2008.
Weyerhaeuser is survived by his wife, Kathy McGoldrick, and by sons Walker and Corydon, and by his father, George Weyerhaeuser and his mother Wendy.
The family is requesting that in lieu of flowers donations be sent to Tacoma's Museum of Glass
of which Weyerhaeuser
was a founding board member, or to Charles Wright Academy
from which he
On the surface, Weyerhaeuser
reported great numbers.
The amount of these land sales can vary from quarter to quarter; for Weyerhaeuser
, this quarter's sales were unusually high.
Disappointing lumber sales means that Weyerhaeuser
basically withheld harvesting logs.
That means the trees are still growing and will yield more fruit down the road.
owns more than 6 million acres in the U.S. and manages another 14 million acres in Canada. On average, a forest grows by 7% each year; that's a lot of extra profit coming down the pipeline.
More importantly, the longer-term looks bright for Weyerhaeuser
… and given just how long-lived timberland assets are, that's exactly the time horizon investors should be eyeballing.