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Merger | 12 Months Ended
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Dec. 31, 2022
Business Combination and Asset Acquisition [Abstract] |
Merger | NOTE 17. MERGERS CATCHMARK MERGER On September 14, 2022, CatchMark and CatchMark Timber Operating Partnership, L.P. (the Partnership) merged into a wholly owned subsidiary (Merger Sub) of PotlatchDeltic, pursuant to the terms of a merger agreement dated May 29, 2022, with the Merger Sub surviving the mergers. CatchMark owned approximately 348,000 acres of superior site index timberlands located in Alabama, Georgia and South Carolina. The CatchMark timber and timberlands assets and operations are included in our Timberlands segment within the Southern region. Under the terms of the merger agreement, immediately prior to the mergers all outstanding unvested CatchMark equity awards and Partnership Long-term Incentive Plan (LTIP) Units were deemed fully vested, at maximum performance to the extent applicable, and converted to shares of CatchMark common stock and common partnership units of the Partnership (Partnership OP Units), respectively. CatchMark stockholders and the holders of the Partnership OP Units received 0.230 shares of PotlatchDeltic common stock for each share of CatchMark common stock and for each Partnership OP Unit and cash in lieu of fractional shares at the effective time of the merg er. As a result of the merger, we issued approximately 11.5 million shares of PotlatchDeltic common stock, including (i) 11.3 million shares in exchange for the outstanding shares of CatchMark common stock, which included unvested CatchMark share-based awards that fully vested upon closing of the merger; and (ii) 0.2 million shares in exchange for the Partnership OP Units. Immediately following the merger, we refinanced $277.5 million of CatchMark's $300.0 million outstanding long-term debt and repaid the remaining $22.5 million with cash on hand. We also entered into $277.5 million of interest rate swaps to fix the interest rates on the refinanced long-term debt. Refer to Note 9: Debt and Note 10: Derivative Instruments for further information. The following table summarizes the cost of the acquisition for accounting purposes:
(in thousands, except shares and per share amounts) |  |
Total CatchMark shares and Partnership OP units outstanding to be converted 1 |  | 48,688,754 |
Exchange ratio 2 |  | 0.23 |
PotlatchDeltic shares issued as merger consideration |  | 11,198,413 |
Price per PotlatchDeltic common share 3 | $ | 44.95 |
Value of PotlatchDeltic common shares issued as merger consideration | $ | 503,369 |
Attribution to consideration transferred for pre-merger services 4 |  | 4,945 |
Total value of equity consideration |  | 508,314 |
Cash paid in lieu of fractional shares |  | 101 |
Transaction costs capitalized 5 |  | 9,341 |
Purchase consideration | $ | 517,756 |
1. Number of shares of CatchMark common stock and Partnership OP units issued and outstanding as of September 14, 2022, immediately prior to the merger, net of fractional shares. These shares exclude 1.5 million unvested CatchMark share-based awards that fully vested, were exchanged for PotlatchDeltic shares upon closing of the merger and were allocated between the pre-merger and post-merger periods. 2. Exchange ratio per the merger agreement. 3. Closing price of PotlatchDeltic common stock on September 14, 2022. 4. Represents the fair value of CatchMark unvested share-based awards that fully vested upon closing of the merger allocated to the pre-merger period, net of impact from shares withheld to cover employee taxes. 5. Transaction costs include items such as investment banking fees, legal services, and other professional fees directly attributable to the merger. These costs are capitalized in an asset acquisition. Based on guidance of ASC 805, we accounted for the transaction as an asset acquisition due to the determination that substantially all of the estimated fair value of the assets acquired was concentrated in the acquired timber and timberlands asset group. Accordingly, the purchase price paid for the assets acquired and liabilities assumed were allocated by management based on relative estimated fair value with the assistance of third-party specialists. The acquired CatchMark timber and timberland assets and associated operations have been included in our Timberlands segment within our Southern region. The following table reflects the fair value of assets acquired and liabilities assumed:
(in thousands) |  |
ASSETS |  |
Cash and cash equivalents | $ | 23,571 |
Other current assets |  | 2,764 |
Intangible assets |  | 3,000 |
Timber and timberlands |  | 782,258 |
Other long-term assets 1 |  | 29,265 |
Total assets acquired |  | 840,858 |
LIABILITIES |  |
Accounts payable and accrued liabilities |  | 10,781 |
Long-term debt |  | 300,000 |
Deferred tax liabilities, net |  | 2,887 |
Other long-term liabilities |  | 9,434 |
Total liabilities assumed |  | 323,102 |
Net assets acquired | $ | 517,756 |
1. Includes $19.2 million for interest rate swap contracts. See Note 10: Derivative Instruments for additional information. During the year ended December 31, 2022, we incurred non-capitalizable merger costs in connection with the CatchMark merger as follows:
(in thousands) |  |
Severance benefits 1 | $ | 7,584 |
Partnership OP Units' tax gross-up 2 |  | 8,124 |
Share-based compensation 3 |  | 9,307 |
Other 4 |  | 2,310 |
Total merger expenses | $ | 27,325 |
1. Qualifying change-in-control and termination benefits for CatchMark executive officers and employees. 2. Tax gross-up payments to holders of Partnership OP Units, as defined in the merger agreement. 3. Share-based compensation for the acceleration of CatchMark equity awards that fully vested upon closing of the merger and were allocated to the post-merger period. 4. Consists primarily of post-merger period fees for legal services and other professional fees. These costs are included in CatchMark merger related expenses in our Consolidated Statements of Operations. LOUTRE MERGER On December 21, 2021, we merged with Loutre Land and Timber Company (Loutre) which owned and managed 51,340 acres of high-quality, well stocked timberlands in southern Arkansas and northern Louisiana. The acquisition cost of $107.7 million was satisfied through the issuance of 1.96 million shares of our common stock to the former Loutre shareholders valued at $100.9 million and the assumption of $6.8 million of liabilities, including $6.3 million of long-term debt which we paid off in December 2021 after the transaction closed. For accounting purposes, the fair value of the shares issued includes a discount for a required minimum holding period by the former Loutre shareholders. We accounted for the transaction as an asset acquisition as substantially all the value of the acquisition was concentrated in the acquired timber and timberlands. We allocated the cost of the acquisition to the net assets acquired based on their relative estimated fair value on the acquisition date. This resulted in an allocation of $105.2 million to timber and timberlands, $2.0 million to mineral rights and $0.5 million to other assets. Additionally, $0.6 million of transaction costs were capitalized.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
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