Creating Value Through Environmental Remediation
Suwannee Lumber Company (Suwannee) is located in Dixie County, Florida – the least populated and lowest-income county in the state. The company was founded in 1954 and, since 1961, had been owned by three families – none of whom had voting control of the business. By 2008, ownership of the business had been divided among multiple generations within the three families.
After weathering the Great Recession, many of the shareholders desired to sell their ownership interests. Suwannee had never paid dividends, had invested its profits back into the business, and a majority of the shareholders did not work in the business. The families wanted to find new owners who would maintain and enhance Suwannee’s standing as the leading private employer in its community.
But they had a problem: Suwannee lacked the infrastructure to attract most institutional and corporate buyers. On top of that, it was managing complex environmental compliance issues that many potential suitors found daunting. That’s when Blue Wolf stepped in.
Familiar with family-run businesses and equipped with deep knowledge of the forest products industry, Blue Wolf recognized that the facility was well-run but lacked the systems, infrastructure, processes, and procedures required by institutional investors.
We also recognized that as the southern-most sawmill in the United States with proximity to major metropolitan areas, Suwannee had intrinsic value due to its location and competitive position with respect to its timber basket. We also knew that – because of our extensive experience with and commitment to environmental issues – we could successfully remediate the site surrounding the mill. Taken together, our team believed we could position the company for long-term success.
In June of 2013, we partnered with two of the family members active in the business and acquired a majority stake in Suwannee. The goal was simple: take a good company and make it great.
Working with the existing management team, an experienced board of directors which we assembled, and our external network, we implemented performance-based profit sharing to align ownership and management; created an institutional grade Safety Health and Environmental program; upgraded financial, reporting and planning systems; and instituted governance discipline and KPI-based management and decision making. We were equally aggressive in responding to the legacy environmental issues, as well as working with regulators, acclaimed engineers, environmental counsel, and state officials to implement a transparent Five-Year Environmental Mitigation Plan. And when it came to Suwannee’s workforce, we increased benefits by making affordable health insurance available to all of Suwannee’s employees – which didn’t exist prior to our investment – as well as adding an on-site medical clinic, increasing the participation in Suwannee’s 401K plan, and adding a vision plan.
In June of 2018, after professionalizing the operation and improving the business, Blue Wolf sold and integrated Suwannee – along with the Caddo River Sawmill in Glenwood, Arkansas – into Conifex Timber Inc., a public company based in Canada. The transaction ensures that Suwannee can be part of a large, institutional owner that will position it for long-term success. As part of the transaction, Blue Wolf received nomination rights for two seats on Conifex’s Board of Directors and became the largest shareholder of Conifex Timber.