The Rising Influence of Rising Affluence

[DewDiligence]

PCL makes $1.1B land acquisition from MeadWestvaco to be financed with 16.2M* newly issued shares:

http://finance.yahoo.com/news/plum-creek-timber-company-inc-200300132.html

Plum Creek Timber Company, Inc. (PCL) today announced it has signed a $1.1 billion purchase and sale agreement to acquire approximately 501,000 acres of industrial timberlands, associated wind and mineral assets, and an interest in approximately 109,000 acres of high-value rural and development-quality lands from MeadWestvaco Corporation.

Specifically, Plum Creek has agreed to acquire:

• 501,000 acres of industrial timberlands in Alabama, Georgia, South Carolina, Virginia, and West Virginia for $869 million;

• An investment in joint ventures consisting of 109,000 acres of high-value rural lands and development-quality lands near Charleston, S.C., for $152 million;

• Subsurface rights, mineral rights and wind power assets associated with the timberlands for $65 million.

Following the completion of the transaction, the timber harvest from the acquired lands is expected to average nearly 3 million tons annually over the next 10 years, growing Plum Creek’s total annual harvest more than 15 percent from recent levels. The mineral and wind assets associated with the timberlands are expected to generate approximately $6 million of annual cash flow, assuming current commodity prices.

The PR on offering of new shares:

http://finance.yahoo.com/news/plum-creek-timber-company-inc-200500833.html

Plum Creek Timber Company, Inc. today announced that it intends to offer 14,100,000 shares of its common stock…in an underwritten public offering, subject to market and other conditions. In addition, Plum Creek intends to grant the underwriters a 30-day option to purchase up to 2,115,000 additional shares of Plum Creek common stock to cover over-allotments, if any. Plum Creek intends to use the net proceeds from the offering, if completed, to finance the acquisition of timberlands and other real estate assets from MeadWestvaco Corporation that was announced earlier today, and for general corporate purposes, including the repayment of a portion of Plum Creek’s outstanding debt.

*Assuming exercise of underwriter’s option.