1.186 million acres of Texas property sold to Campbell Group
Representatives of The Campbell Group, LLC, and Temple-Inland Inc. (NYSE:TIN) today announced that The Campbell Opportunity Timber Fund and Temple-Inland has completed the acquisition of 1.55 million acres of timberland from Temple-Inland Inc. The transaction involves timberlands in Texas, Louisiana, Georgia, and Alabama.
Of the 1.55 million acres, 1.136 million are in Texas and 338,000 are in Louisiana. The combined timberlands in Georgia and Alabama encompass 76,000 acres for $2.38 billion to an investment entity affiliated with The Campbell Group, LLC. The transaction is part of the Company's transformation plan announced in February of this year.
According to Temple-Inland, the total consideration consisted almost entirely of notes due in 2027. In early December, Temple-Inland expects to pledge these notes as collateral for a non-recourse loan. Loan proceeds, after paying current taxes and transaction costs related to the timberland sale, are anticipated to be approximately $1.8 billion. Temple-Inland expects to use the majority of these proceeds to pay a special dividend, which is currently estimated to be approximately $1.1 billion, or $10.25 per share, to its common stockholders. The remaining approximately $700 million of the cash proceeds will be used to reduce debt.
The transaction includes a 20-year fiber supply agreement for pulpwood and a 12-year fiber supply agreement for saw timber, the terms of which are both subject to extension. Fiber will be purchased at market prices. The agreements further require that the timberlands will continue to be managed and third-party certified under the requirements of the Sustainable Forestry Initiative(r) Standard. In addition, The Campbell Group has agreed to continue Temple- Inland's high conservation standards and focus on environmental stewardship. Temple-Inland reiterated that it is on track to complete its transformation plan by the end of 2007.
"The Campbell Group's acquisition of this land allows it to continue its commitment to timberland as a long-term asset and work to ensure the forestlands are managed at the high standards established by Temple-Inland," said John Gilleland, President of The Campbell Group, a Portland Oregon-based timber investment management firm.
"We look forward to continuing the outstanding management practices Temple-Inland has established on these lands," Gilleland said. "These forests are some of the best-managed, highest quality timberlands in the world."
With the completion of the acquisition, a majority of the forestry staff that worked for Temple-Inland has been offered job opportunities with The Campbell Group.
"We are now able to combine the highly qualified staff from Temple-Inland with our own expert team as we continue the quality management of these forestlands. This will benefit the residents of the areas where these timberlands are located and our clients," said Jerry Brodie, The Campbell Group's Managing Director of Operations.
The company will have an office in Diboll and has acquired the field offices in Texas and Louisiana. These locations will enable the company to have its staff located in close proximity to the timberlands where they can best provide for the needs of the area.
The Campbell Group will continue to manage and certify these timberlands under the requirements of the Sustainable Forestry Initiative( Standard, a program established by foresters, conservationists, and scientists who support sustainable forestry practices.
The Campbell Group's history of assisting with environmental stewardship programs is evidenced by the recognition it has received. In 2004, the company was awarded the Fish and Wildlife Steward Award, which was co-sponsored by the Oregon Fish and Wildlife Commission and the Oregon Board of Forestry.
Goldman, Sachs & Co., and Citigroup Global Markets Inc. served as financial advisers and Sutherland Asbill & Brennan LLP served as legal adviser to Temple-Inland in connection with the transaction. Morrison & Foerster LLP and Schwabe, Williamson & Wyatt served as legal advisers to The Campbell Group in connection with the transaction. Stewart Title Guaranty Co. was the provider of title insurance and settlement services for this transaction, coordinated by its National Title Services division. Temple-Inland Inc. operates four business segments: corrugated packaging, forest products, real estate and financial services. Temple-Inland's common stock (TIN) is traded on the New York Stock Exchange. Temple-Inland's address on the World Wide Web is www.templeinland.com.
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