Rayonier and The Rohatyn Group (TRG), an investment firm specializing in emerging markets and real assets, announced an agreement for Rayonier to sell the entities that hold its entire 77% interest in the New Zealand joint venture to a special purpose vehicle formed by Ents LP, an investment fund managed by TRG, for US$710 million. Source: Timberbiz
This sale marks the conclusion of Rayonier’s previously announced strategic review of its New Zealand business and will result in Rayonier becoming exclusively focused on its US operations, while positioning the New Zealand business for continued growth under TRG’s management.
The transaction is expected to close in 2025, subject to the receipt of regulatory approvals and the satisfaction of other closing conditions.
Consistent with Rayonier’s large dispositions completed in 2023 and 2024, this transaction aligns with Rayonier’s previously stated goal of enhancing shareholder value by capitalizing on the disconnect between public and private timberland values and reducing leverage amid a higher interest rate environment.
Further, exiting New Zealand will concentrate Rayonier’s capital in core US markets with favourable long-term growth prospects, reduce Rayonier’s exposure to log export markets, and simplify and streamline Rayonier’s portfolio, financial reporting, and overall value proposition.
In addition, the transaction will position the New Zealand business to drive new growth as it benefits from TRG’s extensive experience managing similar assets in New Zealand and globally. TRG has specific expertise and a capital base very well suited to large-scale forestry assets with a focus on long-term value creation, diversifying market opportunities, and maximizing investment returns.
“After completing a comprehensive review of strategic alternatives for our New Zealand business, we believe the decision to sell our joint venture interest is the best path forward to create value for our shareholders,” said Mark McHugh, President and Chief Executive Officer of Rayonier.
“Rayonier’s presence in New Zealand dates back to 1988, and over time the value of our New Zealand business has appreciated considerably. The team in New Zealand has done an outstanding job in managing these highly productive assets with a long-term mindset, and this joint venture has contributed meaningfully to Rayonier’s growth and success over time.
“Despite these positive attributes, the New Zealand business lacks meaningful synergies with our core US operations, and we further believe that the value of the New Zealand joint venture is not fully appreciated in the public markets. Thus, after careful consideration, we believe now is the appropriate time to sell our interest and opportunistically redeploy capital.
“To this end, we are pleased to transfer the stewardship of this business to TRG, a well-regarded manager of forestry assets in the region.”
Nick Rohatyn, Partner, Founder and Chief Executive Officer of TRG said the company was delighted to acquire Rayonier’s New Zealand business and looks forward to continuing a highly productive and successful operation over the long term.
“Like Rayonier, TRG’s team has a long history of involvement in the New Zealand forestry industry, and we are excited about adding their New Zealand assets to complement our global portfolio of high-quality timberland investments,” he said.
TRG Partner and Head of Forestry & Agriculture, Mike Claridge, added, “Our organization has been investing in the New Zealand forestry sector since 1998. We have long admired Rayonier’s business here, and particularly the professionalism of the team and their suppliers, who are widely recognized as leaders in the New Zealand industry. We look forward to working closely with the team and building on their success to create a sustainable, long-term forestry enterprise.”
