*adds extra fund info and comment from RMS.
Potlatch Corp, a timberland real estate investment trust listed on the NASDAQ, has invested $384 million in 201,000 acres of timberland in Alabama and Mississippi.
It invested using cash and $310 million of new long-term debt.
The forests were acquired from Resource Management Service, a timberland investment firm that once partnered with Hancock Timber Resource Group (HTRG) to build a southern portfolio of timber assets worth over $1.5 billion for HTRG’s institutional clients.
The sale was made from RMS’s $3 billion 2006 vintage fund that holds some of the 4.2 million acres of forestland that RMS acquired from International Paper, the US paper, packaging and forest products company, in April 2006.
“We saw a good opportunity to make some returns for our investors because there was not much inventory out in the market,” Ed Sweeten, executive vice-president, acquisitions & land sales, at RMS. “It looks as though this window of opportunity might have closed now, however, as other timber investment managers have also started to put more properties onto the market. There is a lot more inventory out there than there was at the beginning of the year.”
Potlatch listed in 2010 and recently announced a 7 percent dividend increase to $0.375 a share. This is a 20 percent increase on the third quarter 2013 dividend.
The REIT owns and manages approximately 1.6 million acres of timberland in Alabama, Arkansas, Idaho, Minnesota and Mississippi.