Potlatch Corp. Outlook Revised To Positive From Stable On Acquisition Of Deltic Timber Corp.; #BB+# Rating Affirmed

Stocks and Financial Services Press Releases Tuesday October 24, 2017 09:24
NEW YORK--24 Oct--S&P Global Ratings

NEW YORK (S&P Global Ratings) Oct. 23, 2017-- S&P Global Ratings today revisedits rating outlook on Potlatch Corp. to positive from stable. At the sametime, we affirmed our ratings, including the 'BB+' corporate credit rating, onthe company.

Our ratings affirmation and outlook revision to positive reflect the proposedDeltic acquisition's significant addition to Potlatch's size and scale becauserevenues will increase by 37%, EBITDA by about 30% while adding 530 thousandacres of timberlands in Arkansas, bring Potlatch's total holdings to justunder 2 million acres. Potlach will also acquire two additional saw mills thatwill add 430 million board feet of lumber capacity (a 56% increase toPotlach's capacity) and will also add a medium density fiberboard (MDF) plant.

The positive outlook reflects the potential to raise Potlatch's ratings toinvestment grade (BBB-) given the company's increased size, timberlandsholdings, and earnings capacity after the Deltic acquisition. An upgrade wouldbe predicated on our view that the company will also maintain leverage metricsin the lower half of the 3x area or lower.

We could raise our rating on Potlatch to 'BBB-' over the next year if it issuccessful in integrating Deltic into its operations, achieving targetedsynergies of at least $50 million that demonstrates the company's improvedearnings breadth and stability. We expect that Potlatch will maintain debtleverage of 3x-3.5x while it integrates Deltic.

We could revise our outlook back to stable if Potlatch's acquisition of Delticis delayed or cancelled or if integration difficulties or reduced demand forlumber and saw logs causes Potlatch's leverage to rise toward 4X.

Latest Press Release

SET and IPPD join hands to foster research on sustainable development

The Stock Exchange of Thailand (SET) and The Institute of Public Policy and Development (IPPD), under the Thai government think tank, signed a memorandum of understanding (MoU) to jointly conduct insightful and practical researches to benefit the...

Photo Release: Outstanding Women Leaders for Green Growth Award

Recently, at Grand Hyatt Erawan Hotel, Ms. Kattiya Indaravijaya, KBank President, received the "2019 Outstanding Women Leaders for Green Growth Award" for being an exemplary role model in developing businesses which are environmental friendly and an...

Mastercard Strengthens its Leading Position in Real-Time Payments in Asia Pacific with Increased Focus on Thailand

Global payments and technology leader is bringing further innovation to Thailand as part of its push to advance the regional digital payments agenda Today, at the Bangkok Fintech Fair 2019, Mastercard announced a commitment to deliver a growing suite of...

Ultra Sale on Tokinex Completed in 35 Seconds

Tokinex, the Bitfinex and Ethfinex token sale platform, today announces the successful completion of its 5m USD token sale of Ultra (UOS) in just 35 seconds. Ultra is a protocol and platform positioned to disrupt the $140bn gaming industry by using...

Photo Release: Mastercard Presents its Leading Position in Real-Time Payments at the Bangkok Fintech Fair 2019

Recently, at the Bangkok Fintech Fair 2019, Mastercard announced a commitment to deliver a growing suite of real-time and digital payments solutions across Asia Pacific through its regional real-time payments hub, with data centers in Thailand and...

Related Topics