Shy, rich farmers thrust in spotlight as players in U.S. Sugar deal

By SUSAN SALISBURY

Palm Beach Post Staff Writer

Monday, December 29, 2008

VERO BEACH — The buzz in the close-knit Florida grower crowd started in 2000: A wealthy Missouri farmer was buying groves. Lots of groves.

Almost nine years later, many still haven't met Gaylon Lawrence Sr., 74, or his son, Gaylon Lawrence Jr., 46.

Quiet giants

The Lawrence Group represents the holdings of Gaylon Lawrence Jr., of Nashville and Gaylon Lawrence Sr., of Vero Beach. The father-and-son team made a third bid for U.S. Sugar Corp. in November. Here's a look at their holdings:

Florida citrus: 30,000 acres of citrus, primarily in St. Lucie and Indian River counties. Corporations include Premier Citrus Packers LLC, Premier Citrus Marketing LLC, Premier Citrus Management LL, Premier Land Acquisitions LLC.

In less than 10 years, Premier has become the state's largest producer of fresh fruit.

Farmland: 150,000 acres of farmland in Illinois, Missouri, Arkansas and Mississippi. They grow cotton, soybeans, rice, wheat and corn.

U.S. Airconditioning Distributors, City of Industry, Calif.: The world's largest privately owned heating, ventilation and air conditioning distributor with $600 million in sales. It operates in California, Nevada, Utah, Idaho, Arizona and Florida.

Banking: The Lawrences' first bank was founded in 1908; they now own five community banks with 15 offices in northeast Arkansas, southeast Missouri and Tennessee.

Sources: The Lawrence Group; U.S. Air-conditioning Distributors; Farmers Bank and Trust.

News account mentions of the father-and-son business team are rare and photographs remain scarce. Until recently, interviews with the media were shunned. But the Lawrence footprint is all over Florida. Lawrence Sr.'s Premier Citrus LLC, based in Vero Beach, is the largest citrus fruit grower for the fresh market on Florida's east coast.

Now, the biggest land deal of all has thrust the farming family into an unaccustomed spotlight: The Lawrence Group has launched what amounts to a hostile takeover bid for U.S. Sugar, just as the state is sealing a deal to buy 181,000 acres from the company to help restore the Everglades.

It would seem like a done deal. The South Florida Water Management District voted 4-3 to pay $1.3 billion for U.S. Sugar's land. U.S. Sugar, tightly controlled by a handful of shareholders, has voted to sell.

But under the laws of Delaware, where U.S. Sugar is legally headquartered, the cane company must entertain other bids through Feb. 15. And a lawsuit filed by other shareholders who wanted Lawrence to buy U.S. Sugar is pending.

Perhaps most important is that the Lawrence family, whose three bids to buy U.S. Sugar all have been rebuffed, shows no signs of pulling back.

"We are committed to doing what it takes to buy the company," said Gaylon Lawrence Jr. in a recent phone interview. The votes have changed nothing.

It would be a mistake to underestimate the Lawrence Group, said Andy Taylor, vice president of finance for Peace River Citrus Products in Vero Beach. Gaylon Lawrence Sr., Taylor notes, "is a gentleman of substantial means."

Banking on crops

With 150,000 acres in Illinois, Missouri, Arkansas, Mississippi and Florida, The Lawrence Group is one of the largest family farming enterprises in the United States.

Randall Ramsey, mayor of Parma, Mo., population 1,000, owned the International Harvester farming equipment dealership there and did business with Lawrence Sr. for 30 years.

"He came from common roots. His dad was a small farmer. The lenders, the large insurance companies, trust him and believe in him," Ramsey said.

Not as well-known are the family's holdings in U.S. Airconditioning Distributors Inc., the world's largest privately owned heating, ventilation and air conditioning distributor, with about $600 million a year in sales and a goal of $1 billion by 2010.

A family-owned bank, Farmers Bank & Trust of Blytheville, Ark., dates to 1908. Lawrence Jr., moved to Nashville in 2003 to start an offshoot bank, Tennessee Bank & Trust, where he serves as vice chairman. In all, The Lawrence Group owns five community banks.

Publicity-shy farmers are common, said Missy Marshall, executive director of the Sikeston Area Chamber of Commerce, a Missouri town of 17,000 adjacent to Lawrence land.

Every year, the chamber singles out a farming family for recognition. And every year, "We struggle to find one because they don't want anybody knowing their business. It is kind of comical and charming," Marshall said.

"There are so many others who want to be in the limelight all the time. This is a culture that tends to steer clear of that."

'Something to do'

The Lawrences' foray into Florida farming started with Lawrence Sr.'s 2000 acquisition of a small grove. "He even told me, 'This grove will give me something to do,' " Lawrence Jr. said during a telephone interview from his office at Tennessee Bank & Trust in Nashville.

This season, Premier Citrus LLC, which sells its fruit in the United States, Europe and Japan, expects to pack 2 million boxes of citrus. In the 2007-08 season, Premier was the state's top grapefruit producer, at 1.553 million boxes.

"They are the dominant person in the fresh fruit business now," said Don Rice, CEO of Farm Credit of South Florida in Royal Palm Beach.

Premier's 32,000 acres of grove land is primarily in St. Lucie and Indian River counties. J. Kevin Bynum owns 25 percent of the company and the senior Lawrence owns 75 percent, according to state records.

Bynum said the company expects to harvest about 4.5 million boxes of oranges for the juice market and 2.5 million boxes of fresh fruit.

Unexpected interest

Their interest is surprising, given the twin threat of citrus canker and greening, which has prompted other growers to call it quits. At 576,577 acres, the Florida industry is at its lowest point since record keeping began in 1966, according to the U.S. Department of Agriculture. The Indian River Citrus League is down to 900 grower-members from its peak of about 1,200.

"We are all worried about canker and greening," Bynum said.

But the Lawrences are still buying. In early 2007, as the real estate bubble was bursting, Premier Citrus picked up close to $100 million in groves.

In November, Premier purchased another 2,000 acres of groves in Indian River County for $15 million.

"I love it," said Doug Bournique, executive vice president of the Indian River Citrus League. "I love to see a contrarian out there who thinks it is going to get better."

As for the Lawrences' interest in sugar, Bournique said, "His bid for U.S. Sugar is a tremendous bid for everybody concerned."

Peace River's Taylor agrees. "I think it is consistent with their commitment to agriculture. I think it is in line with their business.

"I don't think they can be ignored."

Just saying no

U.S. Sugar is trying.

In 2006 and again in 2007, U.S. Sugar passed on The Lawrence Group's $575 million bid to buy the company. This November, the Lawrences tried again, offering $300 a share for U.S. Sugar's land and operations. That could total an estimated $588 million.

U.S. Sugar returned a $27million "good faith" check accompanying The Lawrence Group's formal letter of interest, calling the overture a "non-binding expression of interest."

U.S. Sugar clearly favors the South Florida Water Management District's $1.34billion offer for its land. The district would use the 181,000 acres to create a freshwater flow-way to help rejuvenate the Everglades.

U.S. Sugar would get to keep other assets, including a state-of-the-art mill, and retain the right to lease the land for about $50 an acre, or sublease the land to other agriculture interests.

The decision to sell comes at a time when the company is shouldering a $700 million mortgage. Its last sugar crop fell short of estimates.

Lawrence Jr., though, thinks U.S. Sugar's properties can be made profitable.

"Our whole life we have been taking on agricultural properties that other people don't want - either they wanted toget their money out or they were not making enough money. That's what we do," he said. "We like to buy agricultural lands. We like to figure out how to make them produce better."

The Lawrence Group, which says it would turn over thousands of acres to the water district, contends its proposed buyout of U.S. Sugar saves taxpayer money, benefits shareholders and can still clean the Everglades.

Winning friends

That attitude has won fans in Clewiston, a town built around U.S. Sugar operations. "It would have been the absolute best thing for Clewiston and for the shareholders," said Miller Couse, CEO and chairman of the First Bank of Clewiston.

Couse, like some others, refers to a Lawrence purchase proposal in the past tense.

But it may be too soon to call.

Take the federal lawsuit U.S. Sugar shareholders filed. They claim they were never told that The Lawrence Group had tried to buy the company in 2006 - and for a price 51 percent higher than U.S. Sugar stock at that time.

The value of that stock is key to retirees, because they are also shareholders of the private company. In some cases, the stock represents most of their retirement funds. The case is not slated for trial until June 22, long after the water district-U.S. Sugar deal is expected to be finalized. If the shareholders win, it's not clear who would have to ante up any financial damages. Meanwhile, The Lawrence Group's $300-a-share offer for U.S. Sugar is higher than its earlier bid at the heart of the lawsuit.

U.S. Sugar competitor Florida Crystals Corp. has expressed concern that terms of the water district sale could give U.S. Sugar cash, land and a state-financed competitive advantage.

The Lawrence Group has not ruled out its own litigation. Mostly, said Lawrence Jr., they just want to farm. "If it takes land to grow it," he said, "then we are interested."