MWV says sale won’t impact local development

By Liz Segrist
lsegrist@scbiznews.com
Published Oct. 29, 2013

MeadWestvaco Corp.’s sale of all of its U.S. forestlands to Plum Creek Timber Co. Inc. will not impact its real estate development projects, including Nexton in Summerville.

“Other than the fact that it provides more capital that can be invested in those projects, it won’t impact them at all,” said Kenneth T. Seeger, president of MWV’s Community Development and Land Management. “We’re continuing forward with the same management team, the same business plan and the same partnerships.”

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The company’s main focus will be on its remaining 109,000 acres of development property in the Charleston region and its Cabin Bluff development in Georgia. In the Lowcountry, MWV will concentrate on its Nexton and East Edisto developments, 10 industrial parks in Charleston and along I-95 and various joint ventures.

“There’s tremendous potential in those assets,” Seeger said. “We expect to make considerable investments in those projects over the years to come.

MWV sold its forestland to Plum Creek Timber Co. Inc. for approximately $1.1 billion. Plum Creek also will invest in a newly formed partnership between the companies, including MWV’s approximately 109,000 acres of development properties in the Charleston region, the company said in a news release announcing the deal.

The partnership consists of two joint ventures. Plum Creek will contribute $12.5 million in cash into the first, which includes active development projects. MWV will hold a 95% interest in that venture.

The second, which entails a 50-50 ownership stake by each company, contains long-term development projects. Plum Creek will contribute $140 million in cash into this joint venture.

MWV’s Community Development and Land Management business will lead the joint ventures’ activities across all development projects and will be the managing partner.

“I think this is a very great transaction that accomplishes a lot of key objectives for MeadWestvaco and our shareholders,” Seeger said. “We’re making sure we’re in a position to continue to follow through on our commitments to the community.”

MWV has sold 500,000 acres of land over the past six years for rural recreation and investment purpose.

The funds will be used to pay down its undisclosed debt, return value to its shareholders and invest in real estate developments. MWV intends to return approximately $665 million of the proceeds from the transaction to shareholders.

“I think the company felt it’d like to be able to monetize its investment in the land,” Seeger said.

Upon closing, MWV will no longer own forestland assets in the United States. The aggregate value of the transaction, including both parties’ investments in the partnership, is about $1.5 billion. The company will retain ownership of 135,000 acres of forestland in Santa Catarina, Brazil.

The transaction has been approved by the boards of directors of both companies and is anticipated to close by the end of the year. The transaction does not require a shareholder vote for either MWV or Plum Creek.

Reach Liz Segrist at 843-849-3119.

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