East Teak buys Thompson Mahogany Co.

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Historic company that was one of the nation's top genuine mahogany importers will operate as a wholly owned subsidiary

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East Teak Fine Hardwoods Inc., an importer of teak and other hardwood products based in South Carolina and Washington State, purchased Thompson Mahogany Co., a hardwoods importer founded in 1843.

Thompson Mahogany will operate as a wholly owned subsidiary of East Teak, yet will maintain full operational autonomy from its Philadelphia headquarters. The combined entities will leverage the strength of both companies to serve customers in the residential, commercial, hospitality and marine industries.

"Through the grapevine we heard that [Don Thompson, president of Thompson Mahogany] was looking to sell, merge or do something, and we had some people contact him that we had doing some other sales and buys for us," says Wayne Rogers, president and CEO of East Teak. "They were interested and we sat down, talked and things got worked out. Actually we bought them, merged them in with us, but we bought everything - land, buildings, equipment, inventory."

Asked if the current state of the economy and its impact on the wood products industry had anything to do with the business transaction, Rogers says he is sure it did.

"Right now most all lumberyards are struggling. Even though they may be making some money and surviving, they're still struggling. It's nothing like it used to be. Right now it is an advantage for some of them to merge together, to consolidate. There's probably still too many out there. It was an acquisition - we prefer to call it a merger - but we did buy them out. We merged them with us."

Thompson Mahogany Co. is a supplier of tropical hardwoods from Central America, South America and Africa. Thompson was the first company to operate a mill on the Amazon River in Brazil and for decades was one of the nation's top importers of genuine mahogany (Swietenia macrophylla). The company directly imports more than 25 exotic wood species sold in lumber, flooring and decking form, supplying wholesalers, distributors and manufacturers.

Founded in 1972, East Teak Fine Hardwoods imports teak and other hardwood species used as decking, flooring, siding, moldings and custom millwork in the construction of hotels, resorts, office buildings, luxury homes and yachts. East Teak serves the architectural, upscale residential, commercial construction, hospitality and boating industries.

"Thompson Mahogany had been in the market for some time looking to sell or merge with the right, strong partner," says Thompson. "After speaking with a number of potential partners including East Teak, I decided that East Teak was the best fit. The companies have complementary strengths."

Thompson added that there is substantial synergy across the product lines. East Teak will provide Thompson Mahogany with the capability of selling to a larger geographical market and access to substantial millwork capability. Thompson Mahogany will provide East Teak with more species to sell and a distribution center in the Northeast.

"I think this combination is truly a case of one plus one equals three," says Thompson. "I am very excited about the prospects."

Rogers says East Teak will benefit from the new arrangement since Thompson Mahogany buys directly from many countries East Teak does not.

"They already have inspectors, buyers in those countries; you have to have everybody there from start to finish," he says. "In Asia we do, but in South America and Africa we did not ... It will give us the ability to cover a lot bigger territory."

Contacts: East Teak Fine Hardwoods, 1106 Drake Rd., Donalds, SC 29638. Tel: 864-379-2111. www.eastteak.com

Thompson Mahogany, 7400 Edmund St., Philadelphia, PA 19136. Tel: 215-624-1866. www.thompsonmahogany.com

This article originally appeared in the December 2009 issue.

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