1987-1988
Due to his position as Silviculture Branch Director, Charlie Johnson knew about the planned privatization before the official public announcement. Knowing he would need help to fulfill his vision, he discussed his idea with a colleague, Ev Van Eerden, who managed the province's private nursery program. Ev agreed to give the idea some consideration and, eventually, decided to join Charlie in the venture. The government's official announcement was made in the fall of 1987, and Charlie and Ev immediately began talking to the nursery employees about developing a group proposal to buy the nurseries. In the end, almost all of the full-time staff decided to invest in Charlie's vision.
Red Rock Nursery in 1988.
Once they had talked to most of the employees, Charlie and Ev visited the offices of Coopers and Lybrand, a management consulting firm in Victoria. They knew they wanted to submit a proposal to purchase the nurseries, and they knew that they wanted to combine them into one company, but they needed help. Neither of them had any business experience. At Coopers, Charlie was introduced to Chris Worthy, one of the management consultants with the firm. After listening to Charlie's idea, Chris recognized that there was a possibility that PRT could be moulded into an employee-owned company, based on his experiences working with PCL, a large employee-owned construction firm in Alberta. Charlie and Ev liked this idea and they began, with the assistance of Chris and other Cooper's staff, to build the framework necessary to create such a company. They also began developing a business plan for the new company.
Original Vernon Nursery, Pleasant Valley Road, in 1988.
For the next four months, Charlie, Ev, Chris and Dan Davies, who was Chris' assistant at the time, worked night and day to put together the first bid. After a month of evaluation, that bid was rejected, and the government opened the bidding process to public tenders. As a result, the group had to go through the proposal and negotiation process all over again, in the face of outside tenders. This second set of negotiations lasted from February until late August -- seven months full of stress and anxiety. Everyone was worried about what would happen, especially with the nursery employees, if the second proposal was not accepted.
Thornhill Nursery, 1988.
Even after their second bid was accepted, the bargaining continued as the final terms of sale had to be agreed upon before the transfer of the nurseries could be completed. Then, on the evening before the scheduled news conference and signing ceremony, the deal almost fell through. After days of discussion, the government was still not satisfied with the proposed purchase price, and Chris, Charlie and Ev were about to walk out of the negotiation room. At the last minute, however, the government team made a new offer and the final agreement was forged overnight.
Charlie Johnson, Dave Parker (Minister of Forests), and Bob Hudson (Campbell River Nursery) following the signing of the agreement.
On September 1, 1988, six provincial nurseries were sold for $5.7 million to an employee-owned company headed by Charlie Johnson and Ev Van Eerden. Pacific Regeneration Technologies Inc. had become a reality.
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 Before the deal was agreed to by the province, many of the best early ideas about how to structure the company were drawn out on napkins as we sat over our scotch (or beer as preferred by Ev) getting out our frustrations about yet another negotiation meeting. The napkins were preserved in the company files for some time as they did have some of our very best ideas on them.
Sandy MacIver
K.A. MacIver & Associates Inc.
I think I was game for it, but at times it seemed like an awful lot of money to put out. A big risk to take, but I'm glad we took it. It was a pretty hectic year.
Sue Johnson
Enormous energy went into the first sets of meetings with the nurseries when we were trying to let them know what a great opportunity it was. It was a hard deal to pitch though because there was lots of uncertainty. The first meeting went okay, but I sensed that people were tense throughout. We talked and talked about how we could improve the meetings because it was so important to the business plan that we get all the nurseries on board. Finally, I said that I thought a major problem was that we weren't addressing how scared people were. I said to Ev and Charlie "I know that it's important to appear confident, but don't either of you have any doubts about this?" Charlie indicated that he had none, but Ev said "To tell the truth, I haven't had a full night's sleep since this privatization thing was first raised. I have full confidence in Charlie and you guys, but still it's a lot of money and I get concerned." I said, "That's terrific. That's what some of the people out there are bound to be feeling -- please say exactly what you just said at all of the meetings from this point forward and you'll get much better buy-in." Ev did and there was much less tension at each and every meeting after he had told his story.
Sandy MacIver
K.A. MacIver & Associates Inc.
We were now faced with a whole bunch of unfriendly bidders who, for the most part, were other private nurserymen. At a minimum, they wanted to ensure that we would pay a fair price. We were not given anything more than other nursery companies had received in the past. Like most other private forest nurseries in B.C., PRT was also launched on the strength of a five-year seedling contract with the B.C. government.
Ev Van Eerden RPF
President, PRT and
PRT Management Inc.
Ev is a wonderful mathematician and accountant. He didn't use a computer, but every night during the negotiations, he would go home to do spreadsheets, by hand. The next day he would show up -- and he'd probably worked until three in the morning -- with these beautiful handwritten spreadsheets. Then I would take them and put them into the computer so that we could manipulate the numbers. And he always used this little calculator that he'd received from Macleans magazine, and every time something came up he would take it out and tap away. He used it throughout the whole year of negotiations and it never ceased to amaze me that it didn't wear out. We were on a fishing trip one day and the calculator fell out of his pocket. I tucked it away and didn't say a word, but Ev ranted and raved about how he'd lost his favorite calculator. Then, after we signed the deal, we had a dinner at Harrison Hot Springs, and I presented him with this calculator in a little box with a plaque that read: "The little calculator that could."
Chris Worthy
Vice-Chairman,
PRT Management Inc.
and a Director of PRT
I was finishing my work off with Coopers, but working on PRT at night and on the weekends. The first payroll came up and it wasn't a large payroll at the time, but Ev and Charlie had never done anything like that before. So I had them in at Cooper's office one night. We were doing payroll until midnight and I said to them: "You know, I'm going to need a clerical assistant when we get over to our office." They didn't think it was necessary, but I kept them there doing payroll that night. We didn't even have a payroll package. I think I used a spreadsheet on a computer and we had to look up in the Revenue Canada tables what the deductions were. By the time we'd finished, they had agreed to let me hire someone else to help me work on the payroll. But when we did that payroll, Charlie was doing his and Ev's cheques and he overpaid himself by about 50 percent. On Ev's cheque, after the deductions that he put in, Ev owed the company $140. We kept Charlie away from payroll after that.
Dan Davies
Vice-President,
Finance and Administration |