David Nunes started working at Rayonier Inc. this week, but he’s not settling into his new office just yet.
That’s because, after Rayonier splits into two companies at the end of this month, Nunes and the rest of the Rayonier Inc. headquarters staff will move across the river from their current offices on the Southbank at Riverplace Tower to Downtown’s One Enterprise Center.
The headquarters of the company’s performance fibers business, which will be spun off into a new company called Rayonier Advanced Materials Inc., will remain at Riverplace Tower.
Rayonier Advanced Materials will have 67 employees in its 36,000-square-foot space, while Rayonier Inc. will have 49 employees at its 11,000-square-foot space at One Enterprise Center.
Nunes officially joined Rayonier on Monday as chief operating officer, but he will become CEO after the split. Current Rayonier CEO Paul Boynton will become chief executive officer of Rayonier Advanced Materials.
The companies had been planning to share headquarters space at Riverplace Tower, but Boynton said splitting up the offices turned out to be more complicated than they had expected.
“We couldn’t make that work here,” he said.
Instead of renovating the space, it was more cost-efficient to move Rayonier Inc. across the river, he said.
Other than that, Boynton and Nunes said in an interview at the Riverplace Tower office that the split-up is going according to plan.
“We are set and we are ready to go,” Boynton said. “It’s been really a smooth transition for us.”
Life as two companies
After the spinoff, Rayonier Advanced Materials will be the performance fibers business, which produces specialty cellulose fibers used in a wide range of products such as filters, pharmaceuticals and LCD screens.
The fibers are produced at plants in Jesup, Ga., and Fernandina Beach.
Rayonier Inc. will consist of the company’s forest resources business, which owns or manages 2.6 million acres of timberland, and its real estate business, which owns about 200,000 acres for development along the Interstate 95 corridor from Savannah to Daytona Beach.
Nunes joined Rayonier from a similar publicly traded company, Pope Resources, headquartered in Poulsbo, Wash. Nunes had been CEO since 2002.
“I’ve been in the industry so I’m familiar with the broad industry issues,” Nunes said.
However, Pope is much smaller than Rayonier, with a total of 204,000 acres of timberland and development property.
“This (Rayonier) is quite a lot larger from a scale standpoint,” Nunes said.
“I think the company’s really well positioned,” he said, with “an outstanding base of assets and employees.”
“I really saw this as a great opportunity and a great fit,” he said.
Since Pope operates in the West, Nunes said he is less familiar with the Southeast and really didn’t know much about Jacksonville before he arrived at Rayonier.
“I’m thinking of this as an adventure,” he said.
Boynton has been with Rayonier since 1999 and has experience in all areas of the company, but he spent more time in performance fibers before taking over as CEO in 2012. It was a natural choice for him to stay with the performance fibers business.
“I felt pretty comfortable that we could find a high-caliber talent like Dave” to run the timber and real estate businesses, Boynton said.
“We like Dave because he’s got a great experience set. His own personal skill set is also great,” he said.
Completing the team
Rayonier Advanced Materials filled out its management team last week by hiring Benson Woo as chief financial officer.
Woo has more than 30 years of financial and executive management experience, most recently as chief financial officer of Prestolite Electric, a manufacturer of alternator and starter motors for heavy-duty applications.
In addition to separate management teams, the two Rayoniers will also have completely separate boards of directors. Boynton, despite his years of experience with the company, will not have a seat on the Rayonier Inc. board of directors.
Boynton said it’s important for the two companies to have independence and if he stayed on the Rayonier Inc. board, he might get in the way. He said he learned that from his predecessor, Lee Thomas, who retired from the board of directors in 2012 a few months after stepping down as CEO.
Boynton will remain a Rayonier Inc. shareholder. According to the company’s recent proxy statement, he had nearly 500,000 shares and exercisable options of Rayonier stock.
“I’m highly vested today and will be in the future,” he said.
Boynton and Nunes are heading out on the road this week for separate meetings with analysts and investors to promote the two companies’ stocks.
They said it may take more work to educate Wall Street on the performance fibers business of Rayonier Advanced Materials than the timber and real estate business of Rayonier Inc.
“You’ve got an established timber investor community” that knows Rayonier, Nunes said.
It may be confusing to some investors to have two companies with the Rayonier name. However, Boynton said it was more important for the continuity of long-standing customers of the performance fibers business to keep the Rayonier name with that business.
“The average customer has been with us for 45 years,” he said, including one customer that has an 82-year relationship with the business.
It may be convenient to at least come up with a shorthand name for Rayonier Advanced Materials. For example, Jacksonville-based Fidelity National Financial Inc. spun off Fidelity National Information Services Inc. as a separate public company. While its official name remains Fidelity National Information Services, the spinoff company refers to itself as FIS.
Boynton said company officials have not yet thought of a shorter reference for Rayonier Advanced Materials.
The companies expect the spinoff to be completed on June 27, with the new shares of Rayonier Advanced Materials scheduled to being trading on the New York Stock Exchange on Monday, June 30, under the ticker symbol “RYAM.”
Rayonier Inc. will continue trading under its “RYN” ticker symbol.
There are a couple of details that need to be completed. The companies are still waiting for final approvals from the Securities and Exchange Commission and the Internal Revenue Service for the spinoff plan, but those are expected soon.
“Other than that, everything is in place,” Boynton said.