The $93.5 million sale of Anthony Forest Products Co. to a Canadian company was the best choice for the Anthony family, for the firm’s employees, for the communities it operates in and for its customers and suppliers, said CEO Aubra Anthony.
That doesn’t mean it wasn’t a hard choice.
In an interview last week at Anthony Forest Products headquarters in El Dorado, Anthony noted that the 99-year survival of the family business into a fifth generation was a rare feat.
But “there were fewer family members involved in the day-to-day business. We’re down to a literal handful,” he said. “And so as interests get scattered out among the generations, there’s not as strong a sense of involvement and common purpose.”
In addition, Anthony said, the threat of estate taxes led family members to “treasure liquidity. You always have that in mind.”
The family reached consensus on the sale to Canfor Corp., a publicly traded forest products company based in Vancouver, British Columbia, just as it had reached consensus in 2009 to sell 91,360 acres of Anthony timberland and timber-cutting rights for $173 million, Anthony said. That sale was to Molpus Woodlands Group LLC of Jackson, Mississippi.
“It was a family consensus that if an opportunity presented itself, which it did, that this was the best of any possible choice for the family members,” he said. “We just put it off longer than most people wind up doing.”
Anthony Forest Products, founded in 1916 but incorporated in 1965, consists of a Southern pine lumber-producing mill in Urbana (Union County); wood chip mills in Plain Dealing, Louisiana, and Troup, Texas; and engineered wood-laminating plants in El Dorado and Washington, Georgia. And in a joint venture with EACOM Timber Corp. of Montreal, it owns and operates an I-joist manufacturing plant in Sault Ste. Marie, Ontario.
Anthony Forest Products was No. 67 on Arkansas Business’ most recent list of largest private companies in the state. It has 272 employees, 208 of whom are in Arkansas.
(Anthony Forest Products is not affiliated with Anthony Timberlands of Bearden, also one of the state’s largest private companies. However, this being Arkansas, Aubra Anthony and Steve Anthony, who heads Anthony Timberlands, are related, descended from Addison Anthony, who moved from Virginia to south Arkansas in the 1840s. And the Anthony family has been an integral part of south Arkansas and the timber industry for generations.)
‘A Confluence of Interests’
“You always kind of keep your options open in looking around, but this was a confluence of interests in a recovering economy,” said Aubra Anthony. “There are a number of Canadian companies that have been investing in the Southern United States in particular, diversifying out of the home base of British Columbia.” (See Climate Change Drives Canadian Lumber Buying Spree.)
Climbing out of the depths of the Great Recession — Anthony calls it a depression, at least for forest products companies and others heavily dependent on the housing industry — the company’s revenue for the fiscal year that ended in April was up 17 percent, to $143.7 million. That’s much improved from its low-water mark of $90.3 million in the fiscal year that ended in April 2012 but still far below the company’s $185.6 million in revenue in fiscal 2006, before the housing bust and financial crisis.
Under the sale agreement, Anthony Forest Products will retain its management, sales and manufacturing employees, but will become part of Canfor’s Southern forest products business. Canfor has been a supplier for Anthony’s glued laminated plants for more than 10 years.
That means that Anthony and his brother, Russ, executive vice president and manager of company operations at Anthony Forest Products, will be staying on, at least for the next couple of years.
Anthony repeated language from the Sept. 28 press release announcing the sale: “It’s business as usual.”
He’s telling employees, “Nobody is coming in to take your job. Nobody is coming in to take over our business that we have built. In a way, I really think this transaction ensures that this business goes on with our people.”
That’s a message that applies to the communities in which Anthony Forest Products operates as well as to the company’s customers and suppliers, Anthony said.
The company’s very soundness is what appealed to Canfor, he said. “The last thing they want to do is mess it up.”
Anthony, who has been with the company since the mid-1980s, said that though he and other family members — the company employs six — had considered selling for a number of years, “For a lot of people, it’s hard emotionally. They all understand it, but it’s hard emotionally.
“And I can tell you it’s been hard on my son, who’s now working on the laminating side of the business, and my brother Russ’ son, who’s working at the sawmill. They just — it’s like their family dream is disappearing.”
But things change and the timing for a deal was good. Ultimately, Anthony said, the sale means a “continuing promising future for our employees, including family members. Canfor is a very professional, very thorough, very sophisticated company.”
Canfor, he said, which is “stronger financially, has got a long-term commitment with this investment to see it succeed and grow.”