Filing of Certain Prospectuses and Communications in Connection With Business Combination Transactions (425)
October 23 2017 - 4:23PM
Edgar (US Regulatory)
Filed by Deltic Timber Corporation
Pursuant to Rule 425 of the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Deltic Timber Corporation
(Commission File No.: 1-12147)
The following document was made available by Deltic Timber
Corporation on October 23, 2017.
***
Potlatch and Deltic
Timber to Combine Creating Leading Timberland REIT and Lumber Manufacturer
Significantly Increases Scale to Drive Future Growth
by Uniting Highly Complementary Businesses
PotlatchDeltic
by the Numbers
Thousands of skilled Cash available for employees & contractors distribution per share in timberland and
manufacturing accretive in the first year
(1)
operations
ALL-STOCK TRANSACTION OWNERSHIP
Potlatch Shareholders
65%
Deltic Shareholders
35% COMBINED LEADERSHIP Mike Covey
,
Chairman and CEO
Compelling Strategic
Rationale of Combination
Combined company will have diversified timberland base of ~2 million acres and 1.2 BBF lumber capacity
Arkansas footprint of 933,000 timberland acres and sawmill capacity of 630 MMBF Expands successful integrated model of timberland
ownership and lumber manufacturing Combines two highly complementary and successful real estate businesses Southern sawlog harvest
and sawmill consumption volumes provide natural hedge against lagging southern sawlog prices Increased exposure to fast-growing
Texas housing market
Significant Financial Opportunities Beyond What Could be Achieved Independently
Combined market capitalization of over
$3 billion and enterprise value over $4 billion
(2)
CAD per share accretive in the first year, excluding costs to achieve
synergies
(3)
REIT conversion results in significant tax savings on Deltic's timber harvest earnings One-time dividend
estimated at ~$250 million
(4)
consisting of 80% stock and 20% cash will be distributed to PotlatchDeltic stockholders
by the end of 2018 as part of the REIT conversion process Strong balance sheet and improving credit metrics Beginning fourth quarter
2017, Potlatch dividend increases from $1.50 to $1.60
Eric Cremers,
President and COO
John Enlow,
Vice Chairman
BOARD OF DIRECTORS 8
Potlatch Directors
4
Deltic
Directors
HEADQUARTERS
Spokane, Washington
TIMING TO CLOSE
Expected to close in first half 2018
Full run-rate
synergies and operational improvements expected to be achieved by year 2 Pro forma based on current standalone market capitalization
and enterprise value Assuming full run-rate synergies Figure represents an estimate; an earnings & profits study to be completed
in 2018 will determine actual amount; Distributions of both cash and stock will be treated as a taxable dividend. If certain holding
periods are met, the distribution will be taxable to individual stockholders at the 20% “qualified dividend” rate
The Combined Portfolio
Spokane
ll
Bemidji
l
St Mariesi i ji Gwinnin
l
MN ID AR Rock Olal
l
l
Waldold
ll
l
Warren AL Dell-Tinin Fiberi MS El Dorado LA
capacity....
We look forward to completing the transaction and are confident that together we will create a top-tier timber REIT.” –
Mike Covey,
Chairman and CEO of Potlatch
Arkansas Ola
l
l
Potlatch
Landholdings
l
Li
leile Rock
Potlatch Wood Products Manufacturing Facilities
Warrenr
PotlatchDeltic Corporate
l l
Headquarters
Waldold El Dorado Dell-Tinin Fiberi
PotlatchDeltic Southern Operational Headquarters Deltic Landholdings Deltic Wood Products
Manufacturing Facilities Deltic Real Estate Holdings only maximizes value for them with the opportunity potential of this combination...
Furthermore, uniting our high-quality assets, including our deeply talented and dedicated employees, will greatly enhance the
potential of PotlatchDeltic.” –
John Enlow,
President and CEO of Deltic Timber
FORWARD
LOOKING STATEMENTS ADDITIONAL INFORMATION
This communication is being made in respect of the proposed merger transaction involving
Potlatch Corporation (“Potlatch”) and Deltic Timber Corporation (“Deltic”). This communication does not
constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of such jurisdiction. In connection with the proposed merger, Potlatch
and Deltic will file relevant materials with the Securities and Exchange Commission (“SEC”), including a Potlatch
registration statement on Form S-4 that will include a joint proxy statement of Potlatch and Deltic and also constitutes a prospectus
of Potlatch. Potlatch and Deltic also plan to file other documents with the SEC regarding the proposed merger transaction and
a definitive joint proxy statement/prospectus will be mailed to stockholders of Potlatch and Deltic. BEFORE MAKING ANY VOTING
OR INVESTMENT DECISION, SECURITY HOLDERS OF POTLATCH AND DELTIC ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING
THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The joint proxy statement/prospectus, as well as other filings
containing information about Potlatch and Deltic will be available without charge, at the SEC’s Internet site (http://www.sec.gov).
Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint
proxy statement/prospectus can also be obtained, when available, without charge, from Potlatch’s website at http://www.Potlatchcorp.com
under the Investor Resources tab (in the case of documents filed by Potlatch) and on Deltic’s website at https://www.Deltic.com
under the Investor Relations tab (in the case of documents filed by Deltic). Potlatch and Deltic, and certain of their respective
directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation
of proxies from the stockholders of Deltic and Potlatch in respect of the proposed merger transaction. Certain information about
the directors and executive officers of Potlatch is set forth in its Annual Report on Form 10-K for the year ended December 31,
2016, which was filed with the SEC on February 17, 2017, its proxy statement for its 2017 annual meeting of stockholders, which
was filed with the SEC on April 3, 2017 and its Current Report on Form 8-K, which was filed on May 1, 2017. Certain Information
about the directors and executive officers of Deltic is set forth in its Annual Report on Form 10-K for the year ended December
31, 2016, which was filed with the SEC on March 7, 2017, its proxy statement for its 2017 annual meeting of stockholders, which
was filed with the SEC on March 20, 2017, its supplement to the proxy statement for its 2017 annual meeting of the stockholders,
which was filed with the SEC on March 30, 2017 and its Current Reports on Form 8-K, which were filed with the SEC on September
1, 2017, May 2, 2017, March 8, 2017 and February 27, 2017. Other information regarding the participants in the proxy solicitations
and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the joint proxy
statement/prospectus and other relevant documents filed with the SEC when they become available.
CAUTION ABOUT FORWARD-LOOKING
STATEMENTS
This communication contains certain forward-looking information about Potlatch and Deltic that is intended to be
covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act
of 1995. All statements other than statements of historical fact are forward-looking statements. In some cases, you can identify
forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,”
“plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,”
“potential,” “continue,” “could,” “future” or the negative of those terms or other
words of similar meaning. These forward-looking statements include, without limitation, statements relating to the terms and closing
of the proposed transaction between Potlatch and Deltic, the proposed impact of the merger on Potlatch’s financial results,
the estimated distribution of Deltic’s accumulated earnings and profits, and the integration of Deltic’s operations.
You should carefully read forward-looking statements, including statements that contain these words, because they discuss the
future expectations or state other “forward-looking” information about Potlatch and Deltic. A number of important
factors could cause actual results or events to differ materially from those indicated by such forward-looking statements, many
of which are beyond the parties’ control, including the parties’ ability to consummate the transaction or satisfy
the conditions to the completion of the transaction, including the receipt of stockholder approvals, the receipt of regulatory
approvals required for the transaction on the terms expected or on the anticipated schedule; the parties’ ability to meet
expectations regarding the timing, completion and accounting and tax treatments of the transaction; the possibility that any of
the anticipated benefits of the proposed merger will not be realized or will not be realized within the expected time period;
the risk that integration of Deltic’s operations with those of Potlatch will be materially delayed or will be more costly
or difficult than expected; the failure of the proposed merger to close for any other reason; the effect of the announcement of
the merger on customer relationships and operating results (including, without limitation, difficulties in maintaining relationships
with employees or customers); dilution caused by Potlatch’s issuance of additional shares of its common stock in connection
with the merger; the possibility that the merger may be more expensive to complete than anticipated, including as a result of
unexpected factors or events; the diversion of management time on transaction related issues; the estimation of Deltic’s
accumulated earnings and profits is preliminary and may change with further due diligence; general competitive, economic, political
and market conditions and fluctuations, including changes in interest rates, credit availability, adverse weather, cost and availability
of materials used to manufacture products, natural gas pricing and volumes produced; changes in the regulatory environment; the
cyclical nature of the industry in which the parties operate; and the other factors described in Potlatch’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2016 and in its most recent Quarterly Reports on Form 10-Q filed with the
SEC, or described in Deltic’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and its most recent
Quarterly Reports on Form 10-Q filed with the SEC. Potlatch and Deltic assume no obligation to update the information in this
communication, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking
statements, all of which speak only as of the date hereof.
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