CatchMark Timber Trust Inc. is evaluating a potential offer to acquire Phaunos Timber Fund Ltd., a Channel Islands domiciled, closed-end real estate fund which owns a portfolio of premium timberland assets, in a stock-for-stock transaction. If completed, the transaction would significantly increase CatchMark’s market capitalization and enterprise value.
According to a prepared statement, at current stock prices, the combined company would have an $850 million equity value and $1.3 billion enterprise value.
CatchMark’s potential offer for Phaunos, which was announced last year a decision to wind down its operations, values Phaunos at $0.57 per share to be paid in new shares of CatchMark Class A common stock1. The announcement of any firm offer is subject to the satisfaction of a pre-condition and there can be no certainty that any firm offer will be made, even if the pre-condition is satisfied.
Jerry Barag, CatchMark President and CEO, said: “Consistent with our corporate strategy, this transaction would position CatchMark for future growth by strengthening our balance sheet and increasing sustainable diversified cash flow. It also would be CAD accretive and improve our credit metrics.”
Approximately 74% of Phaunos timberlands, based on portfolio value, are located in New Zealand, supplying the high-growth East Asian market. The balance of its assets are located in the Americas.
Barag said: “The Phaunos portfolio fits our existing strategy for acquiring institutional-quality assets with superior productivity that can generate durable growth for our stockholders. It presents a compelling opportunity worth our study and analysis.”
The executive leadership and board of CatchMark would manage the combined company.