Blue Wolf Capital Closes Sale of Suwannee Lumber Company and Caddo River Forest Products to Conifex Timber Inc.

Today, Blue Wolf Capital Partners (Blue Wolf), a New York-based private
equity firm, announced the completion of the sale of Suwannee Lumber
Company (Suwannee) and Caddo River Forest Products (Caddo) to Conifex
Timber Inc. (Conifex), a publicly-traded lumber and sustainable forestry
company operating in British Columbia, Canada (TSX:CFF). A portion of
Blue Wolf’s proceeds will be in the form of Conifex stock, and Blue Wolf
will receive representation on Conifex’s board.

The closing of the transaction represents a significant milestone for
Suwannee and Caddo, each of which Blue Wolf acquired and invested in
after the companies struggled in the wake of the financial crisis. Now
that the two businesses are part of Conifex, a larger and more
diversified forest products company, they are even better positioned for
growth and long term success.

The success of Suwannee and Caddo represents yet another validation of
Blue Wolf’s investment thesis: by embracing complex situations – ones
that other firms often shy away from – and by applying Environmental,
Social, and Governance principles to its investments, Blue Wolf builds
stronger businesses and generates superior returns.

The Story of Suwannee

In 2013, an affiliate of Blue Wolf acquired a majority stake in
Suwannee, which is based in Dixie County, Florida – the least populated
and lowest income county in the state. A family run business struggling
in the wake of the Great Recession, Suwannee had faced a variety of
challenges and had been struggling to find a suitable buyer. That’s when
Blue Wolf invested in the company, modernizing the facility, remediating
the long standing environmental challenges, and providing new health
benefits and an on-site medical clinic for employees. While other
investors were dissuaded by environmental liabilities and inherent
cyclicality, Blue Wolf saw an opportunity for capital investment to
address the shortcomings and build a stronger business. Under Blue
Wolf’s ownership, Suwannee expanded production, strengthened its
management and governance structure, and modernized its manufacturing
facilities.

The Story of Caddo River Forest Products

Following the transformation of Suwannee Lumber Company, an affiliate of
Blue Wolf acquired a controlling interest in Caddo River Forest
Products, a shuttered mill in Glenwood, Arkansas. The financial crisis
had caused Caddo, which employed hundreds of residents in a town of just
2,500 people, to close in 2011. The town relied on the mill as an
economic driver, and when Caddo shut down, the Glenwood area and the
local supply chain felt the negative effects. In 2017, Blue Wolf
approached town leaders and consulted with public officials before
deciding to make an investment. Within six months, Caddo reopened – a
significant moment for the town – and after Blue Wolf upgraded the
sawmill’s equipment and improved its infrastructure, the company quickly
became profitable. Production increased, over one hundred people were
hired, and hundreds more indirect jobs were created in the town and the
supply chain. Blue Wolf’s investment has helped drive an economic
revitalization in Glenwood and the surrounding communities.

Sale to Conifex

Having largely completed its value creation plan, Blue Wolf set out to
find a new owner for Suwannee and Caddo with a long term orientation
that would maintain local jobs, contribute to the local communities, and
continue to invest in both mills. That made Conifex an ideal partner.

“The progress at Caddo and Suwannee has been a big positive in Glenwood,
Arkansas and Dixie County, Florida. It has validated Blue Wolf’s
approach to solving complex challenges, strengthening businesses, and
delivering value to its investors,” said Charles Miller, Partner at Blue
Wolf. “I’m proud to say that, under Blue Wolf’s leadership, both
Suwannee and Caddo have been transformed into companies with a very
bright future, and I look forward to continuing our work together.”

“We have been impressed by the dedicated employees at Suwannee and Caddo
who have played a critical role helping both businesses achieve
success,” said Ken Shields, President and CEO at Conifex. “We are
pleased to welcome Suwannee and Caddo into the Conifex family, and we
look forward to helping both businesses grow in the years to come.”

With the transaction closed, Charles Miller of Blue Wolf and George
Judd, Strategic Advisor to Blue Wolf, have joined the Conifex Board of
Directors.

About Blue Wolf Capital Partners

Blue Wolf Capital Partners LLC is a private equity firm that specializes
in control investments in middle market companies. Leading by
experience, and with a commitment to excellence, Blue Wolf transforms
companies strategically, operationally and collaboratively. Blue Wolf
manages challenging situations and complex relationships between
business, customers, employees, unions, and regulators to build value
for stakeholders. For additional information, please visit www.bluewolfcapital.com.

About Conifex Timber Inc.

Conifex and its subsidiaries’ primary business currently includes timber
harvesting, reforestation, forest management, sawmilling logs into
lumber and wood chips, and value added lumber finishing and
distribution. Conifex’s lumber products are sold in the United States,
Chinese, Canadian and Japanese markets. Conifex has expanded its
operations to include bioenergy production following the commencement of
commercial operations of its power generation facility at Mackenzie,
British Columbia.

View source version on businesswire.com: https://www.businesswire.com/news/home/20180710005504/en/

Leave a Comment