Rayonier Inc. (NYSE:RYN) shares are trading higher premarket on Tuesday. On Monday, the company agreed to sell its 77% stake in its New Zealand joint venture to a special purpose vehicle managed by The Rohatyn Group's Ents LP fund for $710 million.
The sales price implies an enterprise value of $922 million for the New Zealand joint venture, which manages ~287,000 productive acres of timberlands as of December 2024.
The transaction is expected to close in 2025, pending regulatory approvals and other customary conditions.
The company expects proceeds to be used to reduce leverage, return capital to shareholders via special dividends or share repurchases, fund strategic acquisitions, and support other capital priorities.
Rayonier expects the transaction to modestly increase pro forma CAD per share and reduce pro forma Net Debt to Adjusted EBITDA to around 0.3x.
The company currently targets a special dividend of $1.00 to $1.40 per share for 2025, which is projected to be paid in a combination of cash and shares.
This sale finalizes Rayonier’s strategic review of its New Zealand business, allowing the company to focus solely on its U.S. operations with strong growth potential, reduce exposure to log export markets, and streamline its portfolio and financial reporting.
Mark McHugh, President and Chief Executive Officer of Rayonier, said, “Since introducing our asset disposition and capital structure realignment plan in November 2023, we have now completed or announced pending dispositions totaling $1.45 billion--significantly exceeding our original $1 billion target.”
“The success of this plan has allowed us to significantly reduce leverage, return capital to shareholders, and generate CAD and NAV per share accretion, while also leaving us better positioned to create long-term value for our shareholders going forward.”
Investors can gain exposure to the stock via Harbor ETF Trust Harbor AlphaEdge Next Generation REITs ETF (NYSE:AREA) and iShares Global Timber & Forestry ETF (NASDAQ:WOOD).
Price Action: RYN shares are up 0.59% at $27.35 premarket at the last check Tuesday.
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