Australian forestry company OneFortyOne Plantations has received regulatory approval for its takeover of New Zealand-based and Global Forest Partners-owned Nelson Forests.
OFO signed an agreement to acquire Nelson Forests in December 2017, but the New Zealand Overseas Investment Office has only now approved the deal. The purchase is due to complete on September 4.
Nelson Forests is a vertically integrated plantation and sawmill business in the Nelson, Tasman and Marlborough regions of New Zealand. It is currently owned by investment funds advised by Global Forest Partners, which manages more than 650,000 hectares of timberland worldwide worth more than A$3.1 billion ($2.3 billion; €1.9 billion) on behalf of institutional investors.
Nelson Forests owns more than 60,000 hectares of productive plantation as well as the Kaituna Sawmill in Marlborough.
OFO declined to disclose how much it was paying for Nelson but a spokesman for the company said the deal would complement its existing assets in New Zealand.
“We have a significant forest and mill in the Green Triangle region [on the South Australia-Victoria border in Australia] – both are high-quality, high-performing assets,” the spokesman said. “OneFortyOne saw an opportunity to buy a similar set of assets – that is quality forest of scale plus a mill – in New Zealand.”
The spokesman added that it would be business as usual for Nelson Forests in the short term but that OFO intended to invest in the company in future. When the deal was signed in December, OFO said it planned to pursue options to ”increase the scale of both the forest and domestic processing activities in the Nelson region” once the transaction was complete.
OFO chief executive Linda Sewell said the firm was “very pleased” that approval has now been granted. “The decision is important, providing certainty for the Nelson Forests team, customers, the region and the broader NZ forest industry. The acquisition fits nicely with the balance of OFO’s assets in the Green Triangle.”
Campbell Global, Gresham Partners and MinterEllisonRuddWatts were advisory partners to OFO on the transaction.
The firm was formed in 2012 following the acquisition of a 105-year lease of 80,000 hectares of plantation assets from the South Australian government, which it still manages. It also owns the Jubilee Highway sawmill in Mt Gambier, South Australia, and woodchip operations at Portland, Victoria, which it purchased from Carter Holt Harvey in September 2017.