Rayonier Inc. RYN lately introduced an settlement to promote the entities holding its complete 77% stake within the New Zealand three way partnership (JV) to a particular function automobile shaped by Ents LP, an funding fund managed by The Rohatyn Group (“TRG”) for $710 million. The transaction, topic to the receipt of regulatory approvals and the satisfaction of different closing circumstances, is predicted to shut in 2025.
Rayonier’s exit from New Zealand will scale back the corporate’s publicity to log export markets and allow it to simplify and streamline its portfolio, monetary reporting and general worth proposition. It’s going to additionally enable the corporate to give attention to core U.S. markets with favorable long-term development prospects.
The transaction will place the New Zealand enterprise to drive new development because it advantages from TRG’s intensive expertise managing comparable belongings in New Zealand and around the globe.
Particulars of the Transaction
The gross sales worth implies an enterprise worth of $922 million for the New Zealand JV, which manages almost 287,000 productive acres of timberlands as of Dec. 31, 2024.
Rayonier expects the transaction to be modestly accretive to professional forma CAD per share and scale back professional forma Web Debt to Adjusted EBITDA to just about 0.3X, earlier than factoring in any capital redeployment.
Rayonier intends to make use of the transaction proceeds to additional scale back leverage, return capital to shareholders, reinvest in synergistic acquisitions, and/or fund different capital allocation priorities.
Publish transaction, Rayonier anticipates paying a particular dividend for 2025 between $1.00 to $1.40 per share, the small print of which might be introduced later on this 12 months. This particular dividend is projected to be paid in a mix of money and shares.
Administration Commentary
Per Mark McHugh, president and CEO of Rayonier, “Since introducing our asset disposition and capital construction realignment plan in November 2023, we have now now accomplished or introduced pending inclinations totaling $1.45 billion—considerably exceeding our unique $1 billion goal. The success of this plan has allowed us to considerably scale back leverage, return capital to shareholders, and generate CAD and NAV per share accretion whereas additionally leaving us higher positioned to create long-term worth for our shareholders going ahead.”
Conclusion
As evidenced by Rayonier’s substantial inclinations accomplished within the final two years, this transaction is consistent with the corporate’s beforehand acknowledged aim of enhancing shareholder worth by capitalizing on the disconnect between private and non-private timberland values and decreasing leverage amid an elevated rate of interest setting.
Shares of this Zacks Rank #3 (Maintain) firm have declined 4.8% over the previous three months in contrast with the industry’s decline of 9.6%.
Picture Supply: Zacks Funding Analysis
Shares to Take into account
Some better-ranked shares from the broader REIT sector are Welltower WELL and Cousins Properties CUZ, every carrying a Zacks Rank #2 (Purchase) at current. You possibly can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Welltower’s 2025 FFO per share is pegged at $4.89, which signifies year-over-year development of 13.2%.
The Zacks Consensus Estimate for Cousins Properties’ full-year FFO per share is $2.76, which signifies a rise of two.6% from the year-ago interval.
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Cousins Properties Incorporated (CUZ) : Free Stock Analysis Report
Rayonier Inc. (RYN) : Free Stock Analysis Report
Welltower Inc. (WELL) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
