Rayonier Sells New Zealand Joint Venture to The Rohatyn Group for $710 Million
WILDLIGHT, Fla. – Rayonier Inc. (Rayonier), a leading real estate investment trust (REIT) specializing in timberland ownership, management, and innovation, has announced an agreement to sell the entities that hold its entire 77% interest in the New Zealand joint venture to a special purpose vehicle (SPV) formed by Ents LP, an investment fund managed by The Rohatyn Group (TRG), a global investment firm specializing in emerging markets and real assets. The total transaction value is $710 million, subject to net debt, working capital, and other adjustments.
Background
Rayonier’s New Zealand joint venture, Rayonier Matariki Forests Limited (RMFL), is a leading forestry company in New Zealand. It owns and manages approximately 250,000 acres of forests in the North and South Islands of New Zealand. The joint venture was formed in 1998 as a 50-50 partnership between Rayonier and a New Zealand-based forestry company. In 2014, Rayonier acquired the remaining 50% interest in the joint venture, making it a wholly-owned subsidiary.
Impact on Rayonier
The sale of Rayonier’s New Zealand joint venture is expected to provide the company with significant cash proceeds. These proceeds will be used to reduce debt and strengthen Rayonier’s balance sheet. Additionally, the transaction is expected to enable Rayonier to focus on its core U.S. timberlands and real estate businesses.
Impact on The Rohatyn Group
The Rohatyn Group’s acquisition of Rayonier’s New Zealand joint venture is a strategic move to expand its forestry portfolio in the region. New Zealand’s forest industry is growing, driven by increasing demand for wood products, particularly in Asia. This acquisition will provide TRG with a significant presence in the New Zealand forest industry.
Impact on Stakeholders
The sale of Rayonier’s New Zealand joint venture may have various impacts on different stakeholders:
- Rayonier shareholders: The sale of the New Zealand joint venture is expected to provide significant cash proceeds to Rayonier, which will be used to reduce debt and strengthen the company’s balance sheet. This may lead to increased shareholder value.
- Rayonier employees: The impact on employees is uncertain. Rayonier has announced that it will work with TRG to ensure a smooth transition. However, there may be some job losses as a result of the sale.
- New Zealand forest industry: The acquisition by The Rohatyn Group may lead to increased competition in the New Zealand forest industry. However, it may also create opportunities for collaboration and growth.
- Customers: The sale may not have a significant impact on customers, as Rayonier and TRG are both forestry companies and are expected to continue operating in a similar manner.
Conclusion
Rayonier’s sale of its New Zealand joint venture to The Rohatyn Group is a strategic move that is expected to provide significant cash proceeds to Rayonier, strengthen its balance sheet, and enable the company to focus on its core U.S. timberlands and real estate businesses. For The Rohatyn Group, the acquisition represents an opportunity to expand its forestry portfolio in the region and gain a significant presence in the New Zealand forest industry. The impact on stakeholders is uncertain, and the transition is expected to be closely monitored.
The forest industry is an important sector in both the United States and New Zealand, and this transaction highlights the ongoing global demand for wood products. As the industry continues to evolve, companies will need to adapt to changing market conditions and customer preferences. The sale of Rayonier’s New Zealand joint venture is a reminder of the importance of staying agile and focused on core competencies.
