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Jax Daily Record Friday, Aug. 13, 202105:00 AM EST

Cannae sells some Dun & Bradstreet shares; Rayonier AM completing portfolio plan

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Rayonier Inc. earnings rise on timber business strength.
by: Mark Basch Contributing Writer

While not an acquisition, Black Knight has made a significant investment in Dun & Bradstreet Holdings Inc., owning 54.8 million shares, or 12.7% of the stock.

Black Knight CEO Anthony Jabbour also is CEO of Dun & Bradstreet, which is moving its headquarters to Jacksonville.

Investment company Cannae Holdings Inc., which like Black Knight was spun off from Jacksonville-based Fidelity National Financial Inc., is another large investor in Dun & Bradstreet.

As Cannae reported its quarterly earnings last week, it disclosed it sold 8.5 million Dun & Bradstreet shares June 28 for $21.88 a share, but the company remains Cannae’s largest investment.

Dun & Bradstreet’s April proxy statement said Cannae owned 76.6 million shares, or 17.8% of the stock.

Cannae Chairman Bill Foley said in the company’s conference call that Cannae is working with Dun & Bradstreet to seek out possible acquisitions.

“To supplement the building organic momentum, we will also be on the lookout for strong targets that can complement the existing D&B assets and drive further revenue acceleration,” said Foley, who is also chairman of Dun & Bradstreet and Fidelity.

“Anthony Jabbour has also brought in new senior leaders this past quarter and I’m confident the business plans they have laid out will drive growth,” he said.

Rayonier AM completing portfolio plan

Rayonier Advanced Materials Inc. reported second-quarter earnings from continuing operations of 13 cents a share, reversing a loss a year ago, as the company nears completion of its “strategic portfolio optimization” plan.

Jacksonville-based Rayonier AM’s main business is high purity cellulose products and it expanded the business with its 2017 acquisition of Canada-based Tembec Inc.

However, Tembec’s operations included some noncore businesses that Rayonier AM is divesting. 

During its conference call last week, CEO Paul Boynton said the company expects to complete the divestitures Aug. 28 by closing on the sale of its lumber and newsprint assets.

“Each sale was well timed to optimize the value to our shareholders,” Boynton said.

“Now with the lumber and newsprint asset sale, the company is well positioned for the future as we will use the cash flow and the proceeds to reduce leverage and support disciplined investments in our core high purity cellulose business, including investments in green energy and our biofuture.”

RBC Capital Markets analyst Paul Quinn thinks the sale will benefit the company’s stock, as he raised his rating from “sector perform” to “outperform” last week.

“With the sale of the Forest Products and Newsprint businesses expected to close later this month, Rayonier Advanced is a much cleaner story for investors,” Quinn said in his research note.

However, the company’s core business is facing challenges, he said.

“As the market leader in specialty cellulose, Rayonier Advanced has a role in helping to develop new markets to help offset the decline in acetate demand (largely due to falling cigarette filter consumption),” he said.

Rayonier Inc. earnings rise

Rayonier Inc., which split up with Rayonier AM in 2014, reported higher second-quarter earnings as strength in its timber business offset lower earnings in its real estate operations.

The company did say in its quarterly conference call last week it is making continued progress in its Wildlight community in Nassau County, where Rayonier is headquartered.

Chief Financial Officer Mark McHugh said the company closed a $9.1 million sale of 130 acres to a national homebuilder to begin an active adult community.

“The addition of an active adult community is a significant milestone for the Wildlight project, as it adds a complementary market segment, which we believe will help to catalyze additional downstream demand,” McHugh said, according to a company transcript of the call.

“In addition, we closed on 36 residential lots in our Wildlight project for $2.3 million or $65,000 per lot,” he said.

Rayonier reported adjusted earnings of 22 cents a share in the second quarter, doubling last year’s earnings of 11 cents. 

 

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