PRT Income Trust

Capital West Partners became associated with PRT in 1995 when they were engaged to consider and select potential equity investors for PRT. At that time, the options they presented were considered too expensive by PRT's Board of Directors, but as a result of this search, a good relationship was established between the two companies. Capital West, especially Gerry Bellerieve, became very knowledgeable about PRT's business and were impressed with how the company was managed.

In March 1997, Capital West approached PRT with the concept of taking the company public as an Income Trust on the Toronto Stock Exchange (TSE). If the venture was successful, it would substantially strengthen PRT's financial position. After serious consideration, the Board of Directors appointed Vice-Chairman Chris Worthy to begin work on the proposal.

Chris Worthy right, foreground at the signing of the closing documents for the initial public offering, July 11, 1997.

One of the Board's chief concerns was how to maintain the employee ownership component of the company. PRT Management Inc. (PMI) was created to solve this dilemma. Senior management and employees, who had been shareholders in PRT, could now became shareholders of PMI, and a management agreement between the PRT Regeneration Income Trust and PMI would provide additional future financial incentives for PRT employees. The Board of Directors chosen for PMI were Charlie Johnson, Ev Van Eerden, Chris Worthy, Mary Ruhl and Bruce Devitt. Those chosen to sit as Trustees of the Income Trust Fund and as Directors of PRT were David Davenport, Colin Dobell, Allan Laird, Chris Worthy and Ev Van Eerden.

Ev Van Eerden and Dan Davies spent most of June 1997 on a cross country sales trip to present the company to potential investors. Armed with promotional materials and accompanied by some professional handlers, Ev and Dan visited financial institutions in Toronto, Montreal, Winnipeg, Edmonton, Calgary, Vancouver and Victoria. It was a grueling journey, but on July 11 their hard work was rewarded.

On July 12, 1997, the first day of trading, 777,600 PRT Income Trust units were traded on the TSE. The offering was sold out, with over $56 million raised.

The deal is done - one happy bunch of guys! Chris Worthy, Dan Davies (holding cheque), Ev Van Eerden and Charlie Johnson.

It was something that Ev and I never remotely expected to do in 1988 when we co-founded the Company. It is an achievement that our Board and staff can all be very proud of.
Charlie Johnson
Chairman, PRT Management Inc.
(ImPrints, Vol. VII No. 2, July 1997)

I didn't believe it would happen. Even up to about 15 days before it happened, I was still a naysayer. I was pleasantly surprised that it did happen and that we did it so fast. That was a testament to the company's ability to move quickly on something. Going public in three months is aggressive for anybody. That's an aggressive plan. And we did that. But all the things a buyer would want to see in a business were in place. There was a sound customer base, a strategic plan, good relationships with the banks, good management, good systems, and all the people could talk. Anyone in the company can talk to you about PRT's plans and where the company is going.
Chris Worthy
Vice-Chairman,
PRT Management Inc.
and a Director of PRT

I am truly grateful for the opportunity that your [referring to Charlie Johnson] entrepreneurial spirit has provided. I am sure that I speak for all the employees in expressing appreciation for the Johnson vision that created and sustained PRT in our nine formative years. The fact that PRT's public offering was received so favorably, justifies your vision and attests to your leadership in getting PRT to where and what it is today. A sincere thank you from all of us.
Ev Van Eerden
(ImPrints, Vol. VII No. 2, July 1997)

One of my greatest rewards is the fact that the employees, who believed in what Charlie and I were trying to do and who put up their money, sometimes mortgaging their homes to do so, were well rewarded in the end. Their confidence and hard work paid off. They deserved it. It's the old risk/reward thing. In this case, it was worth it. The rewards to the individual shareholders were wonderful. No question about it. It also allowed us to buy out the existing shareholders without any negative financial impact on the company. Going public also positioned the company for the future. The strong balance sheet and financial position of the company will allow PRT to take advantage of opportunities and grow the company in a very significant way in the years to come.
Ev Van Eerden
President, PRT and
PRT Management Inc.

When we went to the party after the company went public, I asked someone from Capital West: "Why is everyone so excited about this? Companies go public all the time." They said: "It's usually one or two people that set out to make a bunch of money, and they do. But this time it's a bunch of people who set out to grow trees and save jobs, and a whole lot of people have benefited. Normally only a very small number of people benefit on a public offering.
Sue Johnson

I guess you could call this story "The Bagman of Bay Street." It was when Ev and I were doing the roadshow, especially the one-on-one presentations. I remember us walking around Bay Street in Toronto, dressed in our dark blue suits and carrying our briefcases. To complete Ev's ensemble, he'd be packing a great big garbage bag, which looked a little bit funny and I think we got a couple of strange looks when we walked into some of the offices of the different institutions that were interested in the presentation. They were generally on the top floors of very nice buildings, with well-appointed offices. We'd be shown into the boardrooms and we'd sit down and go through our presentation and, at the end, Ev would haul out his garbage bag. He'd look around and find some napkins or paper towels which he'd place on the table. And then he'd start pulling seedlings out of his bag to show them what the finished product was. It was interesting -- I think this did provide a good perspective for the people. When Ev starts talking about his seedlings you can tell that there is such a genuine interest in the business and forest seedlings coming from him, that I think it provided an extra degree of comfort to the people we were talking to. At the end of the presentation, he would pile his seedlings back into his garbage bag and then sweep the dirt off the boardroom table.
Dan Davies
Vice-President Finance
and Administration

When we did the public offering, it was interesting because usually in those situations you have the underwriters and their lawyers, and you have the company and its lawyers. And there's usually a lot of antagonism that builds up between the two parties because there is negotiation as to what the price is going to be. When we completed our arrangement last year, both parties said that they had never dealt with a company quite like PRT in that we wanted to do the right thing through the whole set of negotiations. There were opportunities for PRT to make more money from the public offering -- to be greedy -- and we didn't take those opportunities. Both the underwriters and their counsel recognized this and now we're often used as an example of how to do a public offering.
Chris Worthy

Dan and I were chosen to present the company to investors. This was serious business. First of all, the prospectus was prepared with all the numbers and the whole story. Then we sat in front of batteries of lawyers and went through a due diligence process. It needed to be verified that we were not overstating the promise of the business. Your ethics and the values of the company and what it stands for come into play. You have to be very sure that you are factual, objective and honest. It was extremely demanding timewise, healthwise and energywise. I don't think I've ever worked so hard in my entire life. We were always on planes, telling the PRT story to brokers and investors. At age 60, I had to learn a whole new lingo about the investment world and get used to that sort of high-flying, high-energy lifestyle. It was extremely difficult.
     Looking back at it now, I have concluded that it was the best experience of my professional career. It was an easy and wonderful story to tell. A story of regeneration of people, who had come together nine years ago, and who built a great business through very hard work around growing tree seedlings.
Ev Van Eerden

Obviously, it was good opportunity for all the shareholders to make a good return on their investment. But, more importantly, it provided the company an opportunity to move forward again because otherwise we might have been stymied a bit by our debt load. I thought it was a great opportunity.
Dan Davies

[Bastion to Bay Home] [Introduction] [1987-1988] [The first few years] [Milestones] [PRT Income Trust] [PRT Today] [The Future] [ImPrints] [The Harrop Ghost] [The Heart of Saskatchewan] [In Memory] [PRT Home]

ISBN 0-9684201-0-9
© 1998 PRT Management Inc.