Temple-Inland, the forest products company with divisions in real estate and financial services, has agreed to sell 1.55 million acres of timberland to an investment unit of Campbell Group, a Portland, Ore.-based timberland investment management company.
The deal is part of a “transformation plan” implemented by the company to increase cash flow in a time the company has been hurt by the downturn in the housing sector.
The deal also includes a 20-year fiber supply agreement for pulpwood and a 12-year fiber supply agreement for sawtimber with Campbell Group.
"The fiber supply agreements will enable us to capture a significant portion of the fiber grown on these lands,” explained Kenneth Jastrow, chairman and CEO of Temple-Inland. “We are pleased that many of our current forest employees will have the opportunity to continue managing these lands under new ownership.”
The company said earlier this year it would spin off its financial services and real estate operations and sell land, while retaining manufacturing operations of its building products division, as well as its corrugated packaging business. At that time, investor Carl Icahn dropped a proxy bid for control of the company.
The company will use $700 million to pay off debts, while offering a special dividend to shareholders totaling $1.1 billion.
Austin, Texas-based Temple-Inland owns around 1.8 million acres of timberland in the South, including Texas, Louisiana, Alabama and Georgia.