6 August 2015
New Forests is to purchase approximately 4,200 hectares of freehold land and radiata plantations in Marlborough from the Flight Group. Completion of the purchase is subject to approval by the Overseas Investment Office
The agreement forms part of a larger transaction by Flight Group, including the purchase of Flight Timber's sawmilling assets by Timberlink, an Australian timber products processor that is also an investee company of New Forests.
New Forests is a Sydney-based fund manager with more than AUD 2.5 billion in assets under management including the Timberlink business and more than 620,000 hectares of forests, rural land, and conservation investments on behalf of institutional clients. The company has extensive experience investing in Australia, New Zealand, and throughout the Asia-Pacific region. Timberlink manages two softwood sawmills in Australia as well as the associated sales and distribution network, which provides high-quality plantation pine building products to the Australian market.
"The planned acquisition of the high-quality Flight Forests will expand New Forests' presence in New Zealand to a total of more than 12,000 hectares of softwood plantations," said David Brand, CEO of New Forests. "This is an opportunity for our investors to gain exposure to a mature, well-managed plantation estate with access to a domestic processing plant managed by Timberlink."
Brand also commented, "New Forests has demonstrated that the model of aligning the plantation resource with the processing facility reduces risk and will steadily create value. The agreement to acquire the Flight Forests will allow us to secure a domestic market for the timber from the start of the investment."
Timberlink CEO Ian Tyson said of the purchase, "We look forward to expanding our processing capacity into New Zealand and diversifying our product range. Aligning our purchase of Flight Timbers with the forestry assets replicates our business model in Australia and continues to be a differentiator from other timber businesses."
After completion of the transaction, New Forests will appoint a New Zealand-based property management company for forest operations and will seek to achieve Forest Stewardship Council forest management certification for the plantation.
Source: New Forests media release via Scoop