International Paper • 147,000 Acres • GA, NC, SC & VA
“SPP Land is a partner you can trust. I have worked on many land transactions with them over the years and they have been a reliable buyer, seller, and partner. They are true to their word and do what they say they will and deliver on the date expected. Because of their extensive knowledge of timberland, they perform their due diligence in a very timely way and the capital has always been there for a successful closing.”
Ed Sweeten, Former EVP at Resource Management Services
SELLER: In 2005, International Paper (“IP”) announced a transformation plan to improve returns, strengthen the balance sheet, and return cash to shareowners by selling approximately 85 % of its U.S. forestland holdings. They were interested in selling a 4 million-acre package of lands that spanned 12 states and offered the property for sale by a complex two-stage bid sale process. Resource Management Service was the lead on the project. they started looking for partners that would help them fund the venture and help them win the bid offering.
PROPERTY HISTORY: RMS led negotiations for the 4.2 million-acre purchase, and while they had investors for a significant part of the deal, they needed to bring in partners that could help them finance the project. They turned to Southern Pine Plantations (“SPP”) with whom had a 20-year relationship with. They knew they were a reliable company with the assets and experience to tackle such a large and complex acquisition. Some of the land was under timber supply contracts with IP’s mills. SPP was brought in to consider purchasing the lands outside of these agreements totaling 147,000 acres spread across Georgia, South Carolina, North Carolina, and Virginia. Because of the size and scope of this purchase, SPP evaluated the property by performing a comprehensive review of electronic and inventory data, site maps, and legal descriptions. They spent months in the field analyzing the property to be certain they assessed the true value of the land.
SPP SOLUTION: Because of SPP’s thorough evaluation of the land and local market conditions, they were able to add value and offer a higher bid. SPP worked across state lines with the sellers, partners, and a multitude of attorneys to complete the transaction. RMS was very pleased with the outcome of their negotiations with International Paper and were able to satisfy IP’s duty to meet the investment needs of their clients and partners. IP was satisfied with the terms of the agreement, which allowed them to fulfill their commitments to their pulp and paper facilities and meet their long-term goal of selling large tracts of their timberland holdings. The $225 million portion that SPP purchased helped RMS and their partners conclude one of the largest timberland transactions in recent history.