British Columbia Investment Management Corporation (bcIMC) and the crown corporation Public Sector Pension Investment Board (PSP Investments) have entered into a definitive agreement to acquire TimberWest Forest Corp.
Under the terms of the arrangement agreement, holders of stapled units of TimberWest will receive a purchase price of $6.48 in cash on closing of the transaction for each stapled unit owned.
“We are pleased to have reached agreement to acquire TimberWest on terms that provide fair value, immediate liquidity and a premium to TimberWest’s unitholders,” said Doug Pearce, chief investment officer of bcIMC.
“We look forward to placing TimberWest and its unique assets in the hands of stable, well-funded Canadian pension plans that seek to realize the fullest value from their investments over the long-term,” said Gordon J. Fyfe, president and CEO of PSP Investments.
The transaction values the fully diluted stapled units of TimberWest at approximately $910 million, and the total transaction at $1.03 billion when including the assumption of outstanding debt.
As a consequence of the transaction, all convertible debentures not converted and that remain outstanding on closing will thereafter be convertible into the same amount of cash that they would have received under the arrangement as if they had been converted into stapled units as of the closing of the arrangement.
Both companies view the acquisition of TimberWest as a complement to traditional asset classes, as timber and real estate exhibit inflation-hedging characteristics and provide stable risk-adjusted returns, attributes which are particularly well-matched to the needs of pension plans.