Investor brings leading brands together

Consolidation in the wood industries and the machinery/equipment sector serving those industries has been a growing trend in recent years.

Toward the end of last year, the latest mega merger was announced, bringing USNR (wood processing industry equipment) and the Wood Fiber Group (manufacturer and supplier of sawmill consumables, parts and services) together.

The details reveal that both companies were acquired by middle market private equity firm One Equity Partners (OEP).

The merger of the companies is designed to make it a frontrunner for wood processing equipment and after-market parts and consumables, with 2021 revenues at greater than US$500m.

Both companies’ headquarters are just seven miles apart in Washington state – USNR in Woodland and Wood Fiber Group in Ridgefield.

USNR provides comprehensive automation and technology system integration for mills – from log yards all the way through finishing equipment for lumber, veneer/plywood operations and engineered timber.

USNR is best known around the world for providing end-to-end solutions for sawmills and planer mills, including log lines, curve sawing gangs, edger lines, trim-sort-stack systems, dry kilns and the optimisation and control technologies The company serves more than 1,800 customers operating 2,500 mill sites in 56 countries around the world.

Wood Fiber Products acts as a “one-stop shop” provider of leading timber mill products under brands including Simonds International, Burton Saw & Supply, BGR Saws, Cut Technologies, Global Tooling, US Blades, Armstrong Manufacturing and Wright Machine Tool. The company has 12 facilities across all the major North American wood processing regions.

“Combining these two great companies that are headquartered seven miles apart with a long history of collaboration and complementary customer bases, is a natural next step to drive value for the businesses and their customers,” said JB Cherry, senior managing director, OEP.

“The combined company’s scale, technical capacity and global reach provide an ideal platform to benefit from long-term global trends in wood demand and process automation.

“In addition, bringing the two top management teams in the industry together makes the company the acquirer of choice as consolidation of the highly fragmented industry continues and worldwide competition intensifies. We look forward to a productive collaboration with the teams on finding new avenues for growth and building on the companies’ past success.”

As the dust settles from the merger announcement, the synergies are becoming clearer and gaining focus, although the full impact of this combination has yet to be realised.

Craig Tompkins and Dale Brown, leaders of the combined company, shared their vision for the future.

Mr Tomkins, CEO, is responsible for developing growth strategies and organisational structure while overseeing finance, human resources, and mergers and acquisitions that support the overall company.

Mr Tomkins came to the wood processing industry when he joined Burton Saw & Supply as president and CEO in 2015. In 2019 he was named president and CEO of the merged Burton Saw and Simonds International.

Dale Brown, president, is a long-standing member of the USNR team (president since 2018) and has a focus on the day-to-day operations of the combined company.

WHAT PROMPTED THE MERGING OF USNR AND WOOD FIBER GROUP?

Craig Tomkins (CT): The combined companies’ reputations for quality, integrity, innovation, technical service, and value are well aligned and a great cultural fit. The combination will provide better customer coverage and improve our ability to serve the market. Our combined capabilities create a complete product offering to sawmill and plywood customers globally.

WHAT EXCITES YOU ABOUT THIS MERGER?

CT: The most exciting part of this merger is the opportunity it will create not only for our employees but our customers. Contrary to most merger and acquisition activity where companies have overlapping operations and products, our combination is complementary, with adjacent rather than overlapping sub-markets. Coming together we immediately become the most comprehensive supplier in our industry with the ability to provide our customers with everything from the equipment to all of the parts, consumables, and filing room equipment necessary to produce the highest quality products.

Beyond where we are today, the greatest future opportunity is to define what we could be rather than what we are now.

Both of our businesses are technology leaders in our individual sub-markets, and our opportunity is to integrate these technologies to create new products that provide even higher quality and greater throughput for our customers.

WHAT WILL BE YOUR FOCUS FOR THE COMING 12 MONTHS IN MOVING THE COMPANIES FORWARD?

CT: Initial stages of any merger or acquisition are similar. As a management team we will be integrating our culture and our systems. While we work internally, we will be aggressively addressing the R&D opportunities created by coming together.

WHAT IS THE MAJOR BENEFIT FOR CUSTOMERS OF BOTH COMPANIES?

Dale Brown: Many customers are common to both entities. This new relationship will foster easier access to equipment, parts, consumables, service, and more.

On the technical side, we now offer an even wider depth and breadth of knowledge and experience in the solid wood, panel, and secondary wood processing sectors.

As a combined company we have incredible industry expertise in all facets of what it takes to supply the best wood processing operations in the world.

It is our mission to ensure that our customers always recognise and appreciate our role as a critical business partner in their future success.