CatchMark Timber to Be Acquired by PotlatchDeltic

May 31, 2022 | James Sprow | Blue Vault

Shares of CatchMark Timber Trust Inc. CTT shot up 27.7% in premarket trading Tuesday, after the timberlands investment company agreed to be acquired by real estate investment trust (REIT) PotlatchDeltic Corp. PCH, in a stock deal valuing CatchMark at about $634.3 million. Under terms of the deal, CatchMark shareholders will receive 0.23 PotlatchDeltic shares for each CatchMark shares they own. Based on Friday’s closing prices, that values CatchMark shares at about $12.88 each, which represents a 55% premium. The companies said the combined company will have a market capitalization of more than $4 billion, and total enterprise value of more than $5 billion, including $557 million in debt. Annual synergies are expected to be about $16 million, reflected reduced overhead and the elimination of public-company expenses. “With CatchMark, we gain significant scale in three states and diversify our timberland holdings into some of the strongest markets in the U.S. South,” said PotlatchDeltic Chief Executive Eric Cremers. “In addition, the location of CatchMark’s land near large population centers provides attractive rural real estate sales opportunities.” PotlatchDeltic shares, which rallied 3.9% premarket, have lost 7.0% year to date through Friday and CatchMark’s stock has slipped 4.7%, while the S&P 500 SPX has dropped 12.8%.

CatchMark Timber Trust, Inc. was formerly known as Wells Timberland REIT, Inc. through August 2013. It was originally a nontraded REIT sponsored by Wells Real Estate and was formed in September 2005. On December 12, 2013, the REIT listed its common stock on the New York Stock Exchange under the symbol “CTT.” On October 23, 2013, the REIT effectuated a ten-to-one reverse stock split. Then it issued a stock dividend with each outstanding share receiving one share each of Class B-1, Class B-2 and Class B-3 common stock. The combined effect of the ten-to-one reverse stock split and the stock dividend was equivalent to a 2.5-to-one reverse stock split. The recapitalization was intended to achieve a stock price that was consistent with market expectations for underwritten public offerings by REITs.

Sources:  MarketWatch, SEC