Rayonier plans to split into two companies
Jacksonville-based forest products company Rayonier Inc. announced a plan Monday to split up into two publicly traded companies.
One company, which will retain the Rayonier name, will consist of its forest resources and real estate businesses. The other, which has not yet been named, will consist of its performance fibers business.
The performance fibers business, which produces specialty cellulose fibers, is Rayonier’s largest business with revenue of $1.04 billion last year.
The forest resources business, which owns 2.6 million acres of timberland, produced revenue of $382 million in 2013. The real estate business, consisting of 200,000 acres in Florida and Georgia targeted for development projects, had revenue of $149 million.
Chairman and CEO Paul Boynton said in a news release that Rayonier has evolved into “two distinct businesses and investment opportunities. Accordingly, through this separation, each business will gain the flexibility to pursue its own growth strategies and operating priorities, and develop the optimal capital structure and allocation to generate long-term growth and value for shareholders.”
Boynton said the company’s board of directors and management have been considering a split for the past two years.
“With an improving U.S. housing market, strong timber export markets, and the successful expansion of our cellulose specialties capacity, we concluded that now is the optimal time to pursue the separation of these two non-integrated businesses,” he said.
Boynton will become chairman and CEO of the unnamed performance fibers company after the split. The company did not say who will run Rayonier.
The company hopes to complete the split in mid-2014.