Cleveland investment
firm buys Honsador
A Cleveland-based private investment firm has taken its first direct step into the Hawaii market with the purchase of local building materials wholesaler Honsador Lumber.
Key Principal Partners LLC, an affiliate of the $84 billion financial services firm Key Corp., completed the purchase of the $150 million-a-year company on Friday, after negotiations that began earlier this year, said Gregory Davis, a principal of Key Principal Partners.
Previously, San Francisco-based Key Principal had owned a minority interest in Signature Theatres and other mainland-based companies that do business in Hawaii.
The purchase of Honolulu-based Honsador, for roughly $50 million, includes Honsador's two subsidiaries: Honolulu Wood Treating, the state's largest wood treatment company, and Ariel Truss, the state's largest manufacturer of roof trusses. Combined, the companies employ 213 people at four outlets in Hawaii and a facility in Portland, Ore.
Davis said minority partners in the deal include RDV Corp., a investment company owned by billionaire Richard DeVos, and Hawaiian Land Development Corp., owned by local developer Jeffrey Stone.
DeVos is co-founder of the $6 billion-a-year Amway Corp., and his RDV Corp. was a partner with Stone in the acquisition of 642-acre Ko Olina Resort & Marina in 1998.
Stone is the managing partner of Ko Olina Partners LLC, as well as of Princeville Associates LLC, which announced in July that it intends to acquire the 9,000-acre Princeville Resort on Kauai from Princeville Corp. by the end of this year.
Davis said RDV Corp. is an investment firm similar to Key Principal.
"They've invested in our fund and side by side in deals we've done before," he said. "So they heard of our (Honsador) deal and wanted to get involved."
Stone, in turn, heard of the deal through RDV Corp., Davis said, "so that was sort of the connection there."
Jim Pappas, immediate past owner and chairman of Honsador, said in a statement that he had not originally intended to sell the company, but after being approached by Key Principal Partners, he agreed to the deal because he was impressed by the local ties and business philosophies of the new owners.
Pappas bought the company in 1984 from Dick Gray, the brother of George Gray, who founded the company in 1935 as Honolulu Sash and Door.
Davis said Pappas will continue with Honsador as a director and paid adviser, and that because Honsador is a healthy company with excellent management and staff, no changes in the company are expected soon.
"For now we're just running it the way it is," he said.
But down the road, he added, "There's three different companies, and part of our plan is to integrate them better and see what opportunities that creates."
Other plans include upgrading Honsador's computer systems as well as building a new truss plant to take advantage of Gov. Linda Lingle's push to create more affordable housing.
"Because we're such a big fund, we'll be investing a lot of money in (Honsador's) facilities," Davis said.
