CatchMark stock soars after PotlatchDeltic buyout deal at a 55% premium

Shares of CatchMark Timber Trust Inc.
shot up 27.7% in premarket trading Tuesday, after the timberlands investment company agreed to be acquired by real estate investment trust (REIT) PotlatchDeltic Corp.
in a stock deal valuing CatchMark at about $634.3 million. Under terms of the deal, CatchMark shareholders will receive 0.23 PotlatchDeltic shares for each CatchMark shares they own. Based on Friday’s closing prices, that values CatchMark shares at about $12.88 each, which represents a 55% premium. The companies said the combined company will have a market capitalization of more than $4 billion, and total enterprise value of more than $5 billion, including $557 million in debt. Annual synergies are expected to be about $16 million, reflected reduced overhead and the elimination of public-company expenses. “With CatchMark, we gain significant scale in three states and diversify our timberland holdings into some of the strongest markets in the U.S. South,” said PotlatchDeltic Chief Executive Eric Cremers. “In addition, the location of CatchMark’s land near large population centers provides attractive rural real estate sales opportunities.” PotlatchDeltic shares, which rallied 3.9% premarket, have lost 7.0% year to date through Friday and CatchMark’s stock has slipped 4.7%, while the S&P 500
has dropped 12.8%.

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