CANADA - The Public Sector Pension Investment Board and British Columbia Investment Management Corporation have agreed to acquire TimberWest Forest Corp for C$1.03bn ($1.07bn).
British Columbia Investment Management Corporation (bcIMC) and the Public Sector Pension Investment Board (PSP Investments) said the acquisition would meet an investment strategy common to both funds to acquire companies which have the potential to generate investment returns that meet their long-term requirements.
They added the investment was a complement to traditional asset classes, as timber and real estate exhibit inflation-hedging characteristics and provide stable risk-adjusted returns, attributes which are particularly well-matched to the needs of pension plans.
TimberWest is western Canada's largest private timber and land management company with some 327,000 hectares (808,000 acres) of private land.
A joint release by the two investors said they had offered TimberWest unitholders C$6.48 a unit, a 25-percent premium over the 20-day trading average for the units. The units, which consist of debt and equity "stapled" together, closed Monday in Toronto at C$6.47, up C$1.04.
"We are pleased to have reached agreement to acquire TimberWest on terms that provide fair value, immediate liquidity and a premium to TimberWest's unitholders," said bcIMC chief investment officer Doug Pearce. The fund has been a large investor in TimberWest since February 2009, with an effective interest of 22.5% in TimberWest through its ownership of convertible debentures.
PSP Investments president and chief executive officer Gordon Fyfe added: "We look forward to placing TimberWest and its unique assets in the hands of stable, well-funded Canadian pension plans that seek to realize the fullest value from their investments over the long-term."
bcIMC is an independent investment management firm corporation which manages a global investment portfolio of more than $86bn for pension funds and other institutional investors.
PSP Investments manages investments for the pension funds of the Public Service, the Canadian Forces, the Royal Canadian Mounted Police and the Reserve Force.
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