Am Law Firms Cut into $1.1 Billion Timber Deal
UPDATE, 10/30/13, 5:45 p.m. EDT: Additional information on Plum Creek's outside counsel has been added to the article's sixth and seventh paragraphs.
Seattle-based Plum Creek Timber Company has agreed to acquire all of packaging company MeadWestvaco's U.S. timberlands, and will also invest in the latter's South Carolina rural development properties, in a deal worth roughly $1.1 billion.
Announced late Monday, the deal calls for Plum Creek—whose roughly 6.3 million acres make it one of the nation's largest private landowners—to pay $74 million in cash, along with $860 million in the form of a 10-year installment note, in exchange for more than 500,000 acres of forestland spread across Alabama, Georgia, South Carolina, Virginia and West Virginia. Plum Creek will also acquire the rights to coal and wind power assets on those lands, though MeadWestvaco will retain oil and natural gas rights on more than 190,000 acres of Marcellus Shale assets in West Virginia.
The two companies have also agreed to form a joint venture tied to MeadWestvaco's 109,000 acres of rural development land in the Charleston, S.C., area. Plum Creek will pay roughly $152 million in cash for its stake in the arrangement. The deal is expected to close before the end of the year.
Plum Creek—which harvests timber to produce lumber, plywood and fiberboard—said it expects the acquired land will average nearly 3 million tons of harvested timber over the next decade. The company also develops land through a real estate investment trust subsidiary. MeadWestvaco—a packaging company based in Richmond—said it plans to use some of the proceeds from the sale to repay an outstanding loan and to fund development.
Plum Creek's general counsel is James Kraft, a former associate at Milbank, Tweed, Hadley & McCloy. Kraft tells The Am Law Daily that he headed a Plum Creek in-house legal team that led the way for the company on the transaction and that also included in-house attorneys Erwin Barger, Elizabeth Bergquist, Rosemary Daszkiewicz, Jose Quintana, David Sprinkle and Paul Stamnes.
Kraft says the in-house team was assisted by Skadden, Arps, Slate, Meagher & Flom partner Edward Gonzalez on tax matters, as well as by Skadden partner Gregg Noel on securities matters. Davis Wright Tremaine business and finance partner Lynn Loacker also assisted on the deal, as did Robinson & McElwee litigation partner Timothy Miller.
Oppenheimer Wolff & Donnelly finance partner Lloyd Kepple led a team from that firm that also assisted Plum Creek on issues related to the real estate joint venture as well as on due diligence and environmental matters related to the purchase of the timberlands. Oppenheimer partners Carold Eiden and Ranelle Leier also worked on the matter, advising on real estate due diligence and environmental due diligence, respectively. Earlier this year, the firm advised Plum Creek on a joint venture with The Rockefeller Group to develop more than 4,700 acres of land in Florida and Georgia.
According to filings with the Securities and Exchange Commission, Skadden also advised Plum Creek on a related public stock offering of 14.1 million of its shares that is designed to raise capital that will help finance the transaction with MeadWestvaco. Sidley Austin is advising the underwriters in that offering, led by Goldman Sachs, J.P. Morgan Securities and Wells Fargo Securities.
Attorneys at Wachtell, Lipton, Rosen & Katz and Nelson Mullins Riley & Scarborough are advising MeadWestvaco on the sale. Wachtell's team is led by corporate partner Gregory Ostling and also includes corporate of counsel Elliot Stein, as well as antitrust partner Nelson Fitts, executive compensation and benefits partner Adam Shapiro, real estate M&A partner Stephen Gellman, restructuring and finance partner Joshua Feltman, and tax partners Jodi Schwartz and Joshua Holmes. The Wachtell associates working on the deal are Nathaniel Asker, Michael Benn, Rohit Nafday, Damian Peterson, Justin Rosenberg, Richard Ross and Michael Sabbah.
Wachtell has advised MeadWestvaco on a variety of past transactions, including a $860 million deal in 2011 that saw the company spin off its office products business and merge it with Acco Brands. The company also turned to Wachtell in 2005 for the sale of its paper business to private equity buyer Cerberus Capital Management for $2.3 billion.
Nelson Mullins, meanwhile, is fielding a Charleston-based team on the matter that includes corporate partners John Hagerty and Jay Claypoole, environmental law partner N. Jack Smith, tax partner John von Lehe Jr. and associate Tim Zwerner.
As The Am Law Daily has previously reported, MeadWestvaco's general counsel is Wendell Willkie II, a former Simpson Thacher & Bartlett associate who is the grandson of 1940 presidential nominee Wendell Willkie, a founding name partner of Willkie, Farr & Gallagher.