Deltic Timber Acquisition Buys Out Temple-Inland Interest For $20 Million
by February 13, 2013 5:55 pm 245 views
Deltic Timber Corp. has entered into an agreement to purchase the 50 percent membership interest in Del-Tin Fiber, LLC currently owned by TIN, Inc., a wholly owned subsidiary of International Paper Company’s Temple-Inland Inc.
The transaction is valued at $20 million.
Upon completion of the transaction, Deltic will hold 100 percent of the membership interest in the Arkansas limited liability company, which owns and operates a medium density fiberboard plant in El Dorado, Arkansas.
The $20 million aggregate purchase price consists of $5.156 million in cash and an assumption of TIN, Inc.’s $14.844 million in debt guarantees associated with Union County, Arkansas Taxable Industrial Development Revenue Bonds that were issued in 1998 to finance the construction of the Del-Tin Fiber facility. The bonds have a maturity date of December 1, 2027.
“Deltic Timber has owned 50 percent of the Del-Tin Fiber facility since the completion of its construction in June 1998, and we are excited about the opportunity to own the plant outright and utilize Deltic’s proven ability to be very efficient operators of manufacturing facilities to improve operating performance and efficiencies within this operation,” said Ray C. Dillon, President and CEO.
“This investment fits our strategy to grow the assets of Deltic through strategic opportunistic acquisitions. When this strategy is accomplished by an opportunity to grow through additional ownership in a facility that is located here in El Dorado, Arkansas, in an industry that we already know well, and in a plant in which our personnel have been actively involved on a daily basis, the potential synergy should prove accretive to Deltic’s financial performance. This acquisition also fits our vertical integration strategy well since Del-Tin utilizes the residual by-products generated from Deltic’s sawmill operations that result from their production of dimension lumber from timber produced from our excellent fee timberlands.”
El Dorado-based Deltic Timber owns more than 450,000 acres of timberland, operates two sawmills, and is engaged in real estate development, including upscale Chenal Valley in west Little Rock.