The Board of Directors of SDS Lumber Company, including three new board members installed with the goal of finding a buyer for the company, are talking steps to carry out the shareholders’ mandate.
In an interview with Jeff Webber, 62, newly installed President of the Company, it became clear that the goal is to sell the company and its assets, whether to one buyer or divided into separate sales to multiple buyers. “They decided to sell SDS in its entirety, but they will sell piecemeal” says Webber, if there is no single buyer for the mill, timberlands, logging operations, trucking, and marine operations.
There is virtually no consideration being given to paring off ancillary operations in order to re-invest in SDS’s core business of managing timberlands to produce lumber products, nor is Webber planning to upgrade the mill or expand the company’s product lines. It’s “business as usual” until new owners are found, Webber says. Webber did not elaborate on much; his responses to questions were very brief, and several times he declined to respond at all.
The effort to inventory what the company owns is complicated by the existence of related but separate companies owned by the children and grandchildren of the three founders of the company, Wallace Stevenson, Frank Daubenspeck, and Bruce Stevenson. These operations are often linked to SDS by financing or by management agreements. Two of the separate companies include the Broughton Lumber Company, which owns 14,000 acres of timber in Klickitat and Skamania Counties, and the D.M. Stevenson Ranch, LLC, which owns the Best Western Hotels in Hood River and Cascade Locks, and associated restaurants. SDS and Broughton Lumber are linked in a joint venture to build up to 35 wind turbines on timberland owned by each company in Skamania County.
SDS also owns several commercial properties, such as the retail center in White Salmon occupied by Harvest Market, the public library, and other tenants. These will also be sold.
The SDS Lumber Company employs roughly 350 employees, more than 5 percent of Klickitat County’s non-farm payroll, as mill workers, loggers, drivers, marine shipping, and foresters. Webber asserted that even separately “these are good businesses” and the company was not assuming that they would necessarily have to be sold together. He said that the company was finalizing an agreement with an investment banker to market the properties.
Accordingly, the mill could be sold separately; the five tugboats and hopper barges could be sold as a marine shipping business. Certainly the 100,000 acres of SDS timberland could be sold separately from the mill; the Whistling Ridge wind turbine project is currently considered to be part of the timberland properties. Existing logging companies and trucking companies could add SDS’s logging and trucking operations to their own.
In announcing the possible sale of SDS in September, the company said it would “take a thoughtful look at where SDS is heading” and “how it will continue to positively impact Bingen, the Gorge and the entire Northwest,” Webber states. When asked what mechanisms the company would be using to gather community input and address concerns—for example, an advisory group, or a series of public meetings or a weekly radio show or news column—Webber says that is “a very interesting question” but that he had no experience with such communication channels. He declined to speculate further on what the company might do.
Webber, who began working for SDS on Dec. 7, 2020, agreed he was likely to be a “short-termer.” Most companies with the size, the interest, and the financial ability to acquire SDS or large parts of it “don’t need another president in Bingen,” he said.
In the meantime, Webber is focused on the task at hand, continuing to process timber into lumber products in a safe manner. He said he want to make sure all employees go home with “the same number of toes and fingers they arrived with.” He is particularly proud of the efforts of employees to protect each other and the community from Covid-19, pointing to the use of masks, social distancing and cleaning, noting that SDS has not had any case of “employee to employee transmission.”
In the event of a piecemeal sale of SDS assets, it would be bad news for employees, bad news for Bingen and the surrounding communities, bad news for the county, and bad news for the environment. Only the shareholders might benefit.