Weyerhaeuser Acquiring High-Quality Timberlands in North Carolina and Virginia

Rhea-AI Summary

Weyerhaeuser (NYSE: WY) has announced an agreement to acquire 117,000 acres of high-quality timberlands in North Carolina and Virginia from Roanoke Timberlands LLC for $375 million. The acquisition features mature, highly productive timberlands with 81% planted pine acreage, expected to produce an average annual harvest of 7.4 tons per acre over the first five years.

The strategic purchase will deliver an average annual timber free cash flow yield of 5.1% and integrate well with existing Weyerhaeuser operations. Upon closing in Q3 2025, Weyerhaeuser will own/manage approximately 744,000 acres in North Carolina and 150,000 acres in Virginia, along with three mills and two distribution centers, employing over 600 people across both states.

[ "Immediate and sustained portfolio-leading cash flows with 5.1% annual timber free cash flow yield", "Strategic expansion into attractive markets with strong sawlog and fiber demand", "High productivity with 7.4 tons per acre annual harvest expected over first 5 years", "Additional upside potential from real estate and natural climate solutions", "Transaction will be funded through tax-efficient divestitures of non-core timberlands" ]

Positive

• None.

Negative

• Significant cash outlay of $375 million required for acquisition
• Subject to customary closing conditions that could delay or prevent completion

Insights

Forest Industry Financial Analyst

Weyerhaeuser's $375M strategic timberland acquisition strengthens its Southern portfolio with highly productive assets delivering immediate 5.1% cash flow yield.

Weyerhaeuser's $375 million acquisition of 117,000 acres from Roseburg Forest Products represents a calculated move to enhance its Southern Timberlands portfolio with high-value productive assets. The transaction price translates to approximately $3,200 per acre, which appears reasonable given the mature planted pine composition (81% of the acreage) and strong projected harvests of 7.4 tons per acre annually.

The expected 5.1% annual timber free cash flow yield is particularly impressive—significantly outperforming typical timberland returns that usually range between 3-4%. This indicates the exceptional quality and immediate cash-generating potential of these assets. The acquisition allows Weyerhaeuser to achieve its previously announced multi-year growth target, having now acquired over $1.1 billion in high-quality timberlands since 2022.

What makes this deal strategically valuable is the integration potential with existing operations and the expansion into southeastern Virginia markets. The acquisition strengthens Weyerhaeuser's already substantial presence in the region, bringing their total ownership to approximately 744,000 acres in North Carolina and 150,000 acres in Virginia.

The company's approach to financing—primarily through divestiture of non-core timberlands in a tax-efficient manner—demonstrates disciplined capital management. This transaction complements Weyerhaeuser's balanced capital allocation strategy, which has included shareholder returns through dividends and share repurchases while maintaining balance sheet strength.

Beyond timber production, management highlighted "significant optionality" from real estate, natural climate solutions, and other natural resource opportunities—suggesting potential for additional value creation beyond the core timber business. These alternative value streams have become increasingly important for timberland owners as carbon markets develop and land values appreciate in desirable regions.

Capitalizing on unique off-market opportunity to further enhance Southern Timberlands portfolio with highly productive and strategically located acreage

SEATTLE, May 22, 2025 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today announced an agreement to acquire approximately 117,000 acres of high-quality timberlands in North Carolina and Virginia from Roanoke Timberlands LLC, a subsidiary of Roseburg Forest Products, for $375 million. Comprised of mature, highly productive timberlands, the acreage will be well-integrated with existing Weyerhaeuser timberland and mill operations in North Carolina, will expand the company's footprint into attractive markets in southeastern Virginia and will offer substantial alternative value opportunities. The acquisition is expected to deliver immediate and sustained portfolio-leading cash flows within the company's Southern Timberlands business.

Key attributes of the acquisition:

• Located in strong and growing sawlog and fiber markets in the U.S. South
• Primarily fee ownership with 81 percent planted pine acreage, strong site productivity and favorable all-weather logging operability
• Mature planted pine age class expected to produce an average annual harvest of 7.4 tons per acre (or 860,000 tons) over the first five years
• Expected to deliver an average annual timber free cash flow yield of 5.1 percent over the first five years
• Significant optionality to capture additional upside from real estate, natural climate solutions and natural resource opportunities

"These are exceptional timberlands, and we're excited and well-positioned to capitalize on this unique off-market opportunity," said Devin W. Stockfish, president and chief executive officer. "As we've demonstrated over the last several years, we are committed to active portfolio management across our unmatched timber holdings and have remained disciplined in our approach to growing the value of our timberlands — including through strategically targeted private transactions like the one we're announcing today. Upon closing of this acquisition, we will have acquired more than $1.1 billion of high-quality timberlands since the beginning of 2022, achieving the multi-year growth target we announced in September 2021. Over a similar period, we've also returned a significant amount of cash back to shareholders through dividends and share repurchase and announced a compelling engineered wood products growth opportunity — all while maintaining a strong balance sheet. Looking forward, we will continue to evaluate portfolio enhancement opportunities that improve our timber cash flow and returns, while also balancing other levers across our flexible capital allocation framework to drive superior long-term value for our shareholders."

The acquisition is expected to close in the third quarter and is subject to customary closing conditions. Cash outlay for the transaction is expected to be predominantly sourced from upcoming divestitures of non-core timberlands, and the company anticipates completing these transactions in a tax-efficient manner. When the acquisition is complete, Weyerhaeuser will own or manage approximately 744,000 acres of timberlands in North Carolina and 150,000 acres in Virginia, along with three mills, two distribution centers and additional field offices — employing more than 600 people across the two states.

ABOUT WEYERHAEUSER
Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900 and today owns or controls approximately 10.4 million acres of timberlands in the U.S., as well as additional public timberlands managed under long-term licenses in Canada. Weyerhaeuser has been a global leader in sustainability for more than a century and manages 100 percent of its timberlands on a fully sustainable basis in compliance with internationally recognized sustainable forestry standards. Weyerhaeuser is also one of the largest manufacturers of wood products in North America and operates additional business lines around product distribution, climate solutions, real estate, energy and natural resources, among others. In 2024, the company generated $7.1 billion in net sales and employed approximately 9,400 people who serve customers worldwide. Operated as a real estate investment trust, Weyerhaeuser's common stock trades on the New York Stock Exchange under the symbol WY. Learn more at www.weyerhaeuser.com.

NON-GAAP FINANCIAL MEASURES
This news release references a forward-looking estimate of free cash flow yield, a non-GAAP financial measure that management uses to evaluate the performance of the company and certain investments. Free cash flow yield, as we define it, is calculated by dividing free cash flow — defined as Adjusted EBITDA generated less capital expenditures to support operations — by the purchase price of the investment. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, basis of real estate sold and special items. Free cash flow yield should not be considered in isolation from, and is not intended to represent an alternative to, our GAAP results. We have not provided a reconciliation of this forward-looking non-GAAP financial measure to the most comparable GAAP measure of net cash from operations because free cash flow yield excludes the impact of certain items that are inherently difficult to forecast, such as changes in working capital, capital expenditures, and asset sales. Management cannot estimate these items or their impact on free cash flow yield on a forward-looking basis without unreasonable effort. As a result, investors may be unable to accurately compare the expected impact of the acquisition to our historical results or to those of other companies that may define or calculate free cash flow yield differently. Nonetheless, management believes that providing this forward-looking non-GAAP information is useful to investors. Given the uncertain nature of forward-looking statements, we believe investors are able to take into account the inherent limitations of this forward-looking non-GAAP information. Actual results may differ materially from our estimates due to the potential significance of the excluded items.

FORWARD-LOOKING STATEMENTS
This news release contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, with respect to the company's expectations concerning the occurrence, timing and expected financial and operational contributions of its acquisition of certain North Carolina and Virginia timberlands, including, without limitation, expected synergies, alternative value optionality, average free cash flow yield and average annual harvest tons per acre. We also reference how we plan to source the cash to fund the purchase price for the timberland acquisition through future tax-efficient timberland divestitures, as well as our strategic plans with respect to our timberland portfolio and timber cash flows and returns. Forward-looking statements may be identified by our use of certain words in such statements, including without limitation words such as "continue," "expected," "looking forward," and "will" and similar words, terms and phrases using such terms and words. We also reference expected performance through, or events to occur by or at, a future date, and such references also constitute forward-looking statements. All forward-looking statements speak only as of the date hereof, are based on current expectations and involve and are subject to a number of assumptions, risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. These risks and uncertainties include, but are not limited to, those identified in our 2024 Annual Report on Form 10-K, as well as those set forth from time to time in our other public statements, reports, registration statements, prospectuses, information statements and other filings with the Securities and Exchange Commission. In addition, Weyerhaeuser may not be able to complete the transaction within the stated time period, or at all, because of a number of factors, including without limitation: the occurrence of any event, change or other circumstances that could give rise to a termination of the transaction under the terms of the purchase and sale agreement governing the transaction, or the failure to satisfy other closing conditions. There is no guarantee that any of the events anticipated by these forward-looking statements will occur. If any of the events occur, there is no guarantee what effect they will have on the company's business, results of operations, cash flows, financial condition and future prospects. The company undertakes no obligation to update these forward-looking statements after the date of this news release.

For more information contact:

Weyerhaeuser
Analysts – Andy Taylor, 206-539-3907
Media – Nancy Thompson, 919-861-0342

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SOURCE Weyerhaeuser Company

FAQ

How much is Weyerhaeuser (WY) paying for the North Carolina and Virginia timberlands?

Weyerhaeuser is paying $375 million to acquire approximately 117,000 acres of timberlands from Roanoke Timberlands LLC.

What is the expected timber yield from WY's new timberland acquisition?

The acquisition is expected to produce an average annual harvest of 7.4 tons per acre, or approximately 860,000 tons, over the first five years.

When will Weyerhaeuser's timberland acquisition close?

The acquisition is expected to close in the third quarter of 2025, subject to customary closing conditions.

What is the expected cash flow yield from Weyerhaeuser's new timberland acquisition?

The acquisition is expected to deliver an average annual timber free cash flow yield of 5.1% over the first five years.

How many acres will Weyerhaeuser own in North Carolina and Virginia after the acquisition?

After the acquisition, Weyerhaeuser will own or manage approximately 744,000 acres in North Carolina and 150,000 acres in Virginia.