Rayonier to Purchase Timberland in Washington

March 12, 2008 - Rayonier today announced that it has entered into a definitive agreement to purchase approximately 56,300 acres of timberland in southwestern Washington from Sierra Pacific Industries. The purchase, which is expected to close early in the second quarter, is valued at $215 million, ($3,819 per acre), subject to customary adjustments and prorations. It will increase Rayonier’s Washington holdings to more than 426,000 acres.

“This acquisition reflects our strategy to grow and upgrade our portfolio with timberlands that meet our strategic investment criteria. In this case, we will substantially increase our holdings of merchantable Douglas-fir and western hemlock timber, and gain highly productive land for long-term management,” said Rayonier chairman, president and CEO Lee M. Thomas. “We have a great deal of forestry expertise in the region, which will allow us to successfully integrate this timberland into our portfolio.”

Funding for this cash accretive purchase will be provided through a combination of cash on hand and borrowings from our existing revolving credit facility. The acquisition will be structured as part of a tax-efficient like-kind exchange which will provide significant benefits by eliminating tax on gains from real estate sales, and by increasing returns on the future sales of our higher-and-better-use (HBU) real estate properties.

Rayonier manages its Washington timberlands in accordance with the Sustainable Forestry Initiative® (SFI) and intends to certify the acquired timberlands.

SOURCE: Rayonier

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