CDPQ Acquires Sustainable Timberland in Georgia

Today, Westervelt and CDPQ announced a new strategic partnership focused on sustainable timberland, with acquisition in Georgia:

The Westervelt Company and Caisse de dépôt et placement du Québec (CDPQ), a global investment group, today announced the acquisition of more than 76,000 acres (307 km2) of high-quality pine timberland and the creation of a new strategic partnership that will focus on sustainable timberland management. 

The newly acquired property had been owned and managed for nearly a century by Superior Pine Products, a family-owned company headquartered in Georgia. 

This was a rare opportunity to purchase a special timberland asset in southeast Georgia. The land matches Westervelt’s strategic growth and diversification objectives, and its age class distribution balances growth and sustainability goals,” said Westervelt President and CEO Brian Luoma.

This transaction illustrates what our Sustainable Land Management initiative is all about: investing in land with partners who truly share our values and culture of investing constructively. That’s why we are delighted to join forces with Westervelt, a family-owned business focused on environmental stewardship and innovation, for this first investment in the United States as part of this partnership. Working forests are unique assets and we believe they will become of increasing importance in the fight against climate change and the transition to a greener economy,” said Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at CDPQ.

This is more than a land deal for us. Superior Pine shares Westervelt’s commitments to sustainability, responsible land management and stewardship. This land will be managed into the future in a manner that honors the Superior legacy. CDPQ shares the same organizational values and is respected for their impactful and innovative investment approach that is aligned with our long-term sustainable land management objectives,” said Cade Warner, Chief Sustainability Officer at Westervelt.

“As we move forward with our strategic plan to geographically diversify our timberland holdings, this transaction will enable our Company to grow in other market areas while retaining ownership in our core area of operations.  Westervelt and CDPQ align with our Company values and commitment to sustainability, so we are excited about this opportunity for all entities and look forward to future possibilities for growth,” said Scott Griffin, President and CEO at Superior Pine Products Company.

The Westervelt Company, headquartered in Tuscaloosa, Ala., was founded in 1884 by Herbert Westervelt, and is still family-owned and managed. Westervelt has a long history of land stewardship, sustainability, environmental excellence and quality. The company’s legacy of innovation was a key driver in their interest in partnering with CDPQ. 

About The Westervelt Company

The Westervelt Company, a privately held company headquartered in Tuscaloosa, Ala., was founded in 1884 and is currently under the fourth generation of family leadership. Westervelt is an industry leader in land management, wood products manufacturing and environmental mitigation. The company is recognized for excellence in sustainable forest management, responsibly sourced forest products and services, natural resource stewardship and ecosystem conservation. With more than half a million acres of land under Westervelt management, Westervelt’s diverse businesses all work together to ensure the sustainable stewardship of natural resources today, tomorrow and for many generations to come. 

About CDPQ

At Caisse de dépôt et placement du Québec (CDPQ), we invest constructively to generate sustainable returns over the long term. As a global investment group managing funds for public retirement and insurance plans, we work alongside our partners to build enterprises that drive performance and progress. We are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at June 30, 2021 CDPQ’s net assets total CAD 390 billion. For more information, visit cdpq.com, follow us on Twitter or consult our Facebook or LinkedIn pages.

About Superior Pine Products Company

Superior Pine Products Company is a multi-generational, family-owned business that owns and operates timberland in Georgia, Alabama, and South Carolina.  With nearly 100 years of experience in forest innovation, Superior Pine remains dedicated to sustainably managing the land and forest to achieve value for all of its stakeholders, as well as the surrounding communities.  Superior Pine is excited about utilizing this transaction to expand into other markets beyond its core holdings.  

This is an interesting deal, one that caught me by surprise but the more I read about Superior Pine Products Company, the more I understand why CDPQ and Westervelt Company chose to acquire this great asset:

Generations of pioneers, with a vision and steadfast determination to responsibly manage the natural resources, entrusted us with a legacy.

Superior Pine is dedicated to responsible land management. “Take care of the land and the people that preserve it” was instilled in us by our founders and that goal remains as strong today as it was then.

That’s the legacy of stewardship.

Care & Preservation

Our land managers have dedicated their lives to the care and preservation of land. It is this commitment to sustainable land management that provides for future generations of shareholders and the surrounding communities while growing the forest of the future, continually vigilant and responsive to the ever-evolving needs of the land.

Innovators in Silviculture

At Superior Pine, we know our business. Over 100 years of experience in forestry innovation, we are the experts in utilizing the land and forest to achieve maximum value, all while continually working to preserve the sustainability of the forest of the future. We assess, maintain and manage forestland for a desired product while protecting, preserving and conserving the delicate ecosystems and habitats that are created within the forest.

Passion for Stewardship

Through fire management, wildlife habitat conservation, ecosystem conservation, soil and water conservation, we not only protect the value of the future product, we preserve and protect the inherent ecological balances of nature. Land is our livelihood, our heritage and our passion. It’s this passion for stewardship that makes us the best at what we do.

OUR VISION

We exist to excel as a timber, land and natural resource investment vehicle – as an employer, business and community partner – and as a steward of our land and the planet.

OUR MISSION

We are focused on increasing the value and profitability of our business through operational excellence, innovation, and strategic and opportunistic transactions – always with an emphasis on sustainability.

OUR STRATEGY

We will manage our forests and other natural resource assets to optimize our shareholders’ investment performance by emphasizing asset productivity and sustainability, while always prioritizing operational efficiency, practicing transactional discipline, and maintaining consistent profitability.

OUR ROOTS

The past reflected in the present, influencing the future.

Generations ago, in the late 1800’s, the Superior Company was built by dreamers, builders and innovators; pioneers with a passion to responsibly and diligently create and manage resources for the betterment of their families and their community. Early on, they established themselves as one of the largest suppliers of chemicals in the paper making industry. From there, they organized the Superior Pine Products Company in the 1920’s, acquiring the Suwannee Forest as a raw material source.

Establishing roots in the Suwannee Forest in Fargo, Georgia, the Superior Pine Company’s management of this rich land has become a model throughout the region. With the success of Superior Pine and the desire to diversify interests, Superior Berries was born. Innovation, progress and responsible, sustainable land management in action. That’s the heart of farming.

Superior isn’t just a local business; we are a community. Reaching far beyond forest management and blueberry fields, the Superior Company continually contributes to the livelihood of the Fargo community, sponsoring many local initiatives, building projects, youth programs, educational funds and charitable events.

It’s with this commitment to honoring the innovative spirit of progress provided by past generations that the Superior Company continues to flourish, not just as a business but as a community. Continually striving to maintain the integrity of the land delegated to us through heritage, the time-honored traditions instilled in us by our forefathers continue. We value this legacy.

Then read up on CDPQ’s partner on this deal, the Westervelt Company:

The Westervelt Company has a long history of sustainability, environmental responsibility and quality, and that has not changed. Even as our workplaces and locations see changes to address the current pandemic, the commitments we have to sustainability and to conserving our environment are unchanged. Now more than ever, we appreciate the beauty and value of our natural resources, and our employees’ commitment to safeguard them is unwavering.

In 1884, Herbert Westervelt began a career in the paper industry, developing Prairie States Paper Corporation, now known as The Westervelt Company. Realizing the importance of nature as a major resource in the paper-making business, the Westervelt family instilled an appreciation for the environment and its conservation.

Appreciation of conservation facilitated our evolution from a manufacturing to a land resource management organization. With over half a million acres of timberlands, we continue to grow with the land serving as our guide. Today we focus on businesses which sustain our natural resources for the future. We are stewards of the land.

I'd conclude there's strong alignment of interests between Superior Pine, the Westervelt Company and CDPQ.

Apart from this, some people may wonder if this deal is because CDPQ is hedging against inflation.

Maybe, I don't know, or maybe they just saw a great opportunity to own a great timberland asset with a solid partner over the long run.

High-quality timberland is a sought after asset at large Canadian pensions.

Back in May, I discussed why APG and BCI were part of a consortium led by BTG Pactual’s Timberland Investment Group that acquired Arauco's timberland assets in Chile for US$385.5 million.

There aren't that many opportunities to buy high-quality timberland assets, and you definitely need the right partners on these deals.

In other related news, CDPQ invested in Mexico's Grupo Diagnóstico Aries today:

One of Mexico’s fastest growing medical diagnostic services groups to use proceeds to fund organic growth opportunities and strategic acquisitions, and continue to invest in its operations and digitalization to create long term value 

Caisse de dépôt et placement du Québec (CDPQ), a global investment group, today announced that it will acquire a significant minority stake in Grupo Diagnóstico Aries (the “Company”), one of the fastest growing medical diagnostic services groups in Mexico. The transaction is subject to customary regulatory approvals. 

Founded in 2012 and headquartered in Mexico City, Grupo Diagnóstico Aries is a consortium of nine brands with 249 locations across nine states, including three blood banks and sixteen mobile units. Additionally, the Company operates three in-house laboratories in private hospitals, and serves more than 150 clinics and public hospitals. After several strategic acquisitions and sustained organic growth, the Company has become one of Mexico’s most extensive networks of testing laboratories in the medical diagnostic services sector.

"We are very proud that a company with the record and prestige of CDPQ, with over 50 years of experience investing in a variety of industries globally, has shown interest in our company, our market and our country. We will continue to work at the level of excellence that has always characterized us. And now together with CDPQ, we will continue to grow and consolidate Grupo Diagnóstico Aries as a world-class company,” said Ernesto Lopez Clariond, Chairman of the Board of Directors of Empresas Aries. 

“We are pleased to be investing in Grupo Diagnóstico Aries, who are committed to helping millions of people living in Mexico prevent, detect, and treat their health conditions,” said Martin Laguerre, Executive Vice-President and Head of Private Equity and Capital Solutions at CDPQ. “The management team have demonstrated sound strategic thinking and strong operating capabilities to drive the Company’s success to date. We look forward to working with them to capitalize on growth and digitalization opportunities to create value and consolidate the Company’s position in the medical diagnostic service industry in Mexico”. 

Grupo Diagnóstico Aries offers a comprehensive range of services in laboratory testing in the disciplines of toxicology, molecular biology with a COVID-19 focus, cytology and pathology, immunology, urinalysis, specialized tests, and other tests. The Company also performs a wide range of clinical laboratory procedures in medical imaging, radiology, audiology, endoscopy, cardiology/echocardiology and densitometry. 

ABOUT GRUPO DIAGNÓSTICO ARIES 

Grupo Diagnóstico Aries (GDA) is part of the large family of Empresas Aries, a 100% Mexican business group, firmly committed to the development and social welfare of Mexicans, through its health, housing, education and property management divisions.

GDA's mission is to provide excellent medical diagnostic services. Our responsibility extends beyond providing service or earning a profit as we consider it a privilege that our patients entrust us with their health. For this reason, our ambition is to continue serving our customers with the quality and warmth that characterize us. For more information, visit grupodiagnosticoaries.com

 
Grupo Diagnósticois exactly the sort of asset you want in a fast-growing country like Mexico.

These diagnostic testing/ clinical laboratory testing companies are typically cash flow positive and counter-cyclical, meaning their fortunes aren't tied to the economy.
 
The fact that Grupo Diagnóstico Aries (GDA) is part of the large family of Empresas Aries, just adds credibility to the deal. 

CDPQ will own a significant minority stake and GDA will continue to perate under its current management, growing its operations. 

This deal and the acquisition of sustainable timberland in Georgia are great long-term deals.

Below, at the Westervelt Company,sustainability isn't something they do, it's something they are. 
 
Also, in the late 1800's, Paper Makers Chemical started in Pennsylvania and Michigan. They became one of the largest suppliers of chemicals to the paper making  industry. In the mid 1920's the owners of PMC organized Superior Pine Products Company as a subsidiary and acquired the Suwannee Forest as a raw material source for rosin. In 1931, Paper Makers Chemical Co. was sold to Hercules Powder Co., but Superior Pine Products was retained by the principals. Suwannee Forest has become a model throughout the region.

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