JACKSONVILLE, Fla. (AP) — Forest products company Rayonier is planning to split into two separate, publicly traded companies later this year. Its fourth-quarter results also beat Wall Street's expectations.
The stock surged in Monday premarket trading.
Rayonier said that it plans to separate its performance fibers business from its forest resources and real estate businesses.
"With an improving U.S. housing market, strong timber export markets, and the successful expansion of our cellulose specialties capacity, we concluded that now is the optimal time to pursue the separation of these two non-integrated businesses," Chairman, President and CEO Paul Boynton said in a statement.
The separation is expected to be finished in mid-2014, with each company anticipated to list on the New York Stock Exchange. The spinoff doesn't require a shareholder vote, but needs final approval from Rayonier's board. It also needs a favorable ruling from the Internal Revenue Service related to the tax-free status of the action.
Once the separation is complete, Rayonier Inc. will include the existing forest resources and real estate businesses. The company will keep its status as a real estate investment trust.
The performance fibers company has yet to be named. Boynton will serve as its chairman, president and CEO and will help look for a new Rayonier CEO.
The two companies will each have their own boards, with the current Rayonier board members assigned to the board of one of the two companies. Richard Kincaid — currently a Rayonier director — will serve as Rayonier's chairman. Board member David Brown will be lead director of the performance fibers' board.
Rayonier also announced Monday that its fourth-quarter net income rose 5 percent to $79.7 million, or 62 cents per share, from $75.6 million, or 59 cents per share.
Income from continuing operations was 64 cents per share.
Revenue climbed 22 percent to $520.2 million from $412.7 million.
Analysts polled by FactSet expected earnings of 52 cents per share on revenue of $437.8 million.
For the year, Rayonier earned $371.9 million, or $2.86 per share. In the prior year it earned $278.7 million, or $2.17 per share. Adjusted earnings were $2.41 per share. Annual revenue increased 16 percent to $1.71 billion from $1.48 billion.
Shares of Rayonier added $3.32, or 8.1 percent, to $44.50 in premarket trading about 15 minutes before the market open.