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For Bakers, life without Florida Rock stirs 'mixed emotions'

Feb, 26 2007

The family behind the firm that was recently bought for $4.6 billion has had a local business role for generations. It's hard to imagine now, because his family is so intertwined with Florida Rock Industries Inc., but if John Baker had his way, he would have pursued a different career. "I'd always wanted to not work for the family company," he said. But when John left the Marine Corps in 1974, his brother, Ted, then the president of Florida Rock, convinced him that he belonged in the family business. "That moment just changed everything," John Baker said. Baker, who received a law degree from the University of Florida before joining the Marines, became an in-house lawyer for the company his father had founded. He eventually succeeded Ted as CEO in 1996, with Ted remaining as chairman. And the torch has been passed to a third generation of Bakers, as both John and Ted have sons working for Florida Rock. So it might have been a little surprising last week when Florida Rock agreed to a $4.6 billion buyout by Vulcan Materials Co. Florida Rock has been rumored as a takeover candidate many times over the years but the Bakers, who controlled the company with 25 percent of the stock, have been disinclined to sell. But Vulcan's offer, which represented a 45 percent premium over Florida Rock's stock price, was too good to pass up. "It's an emotional time," Baker said. But, "this is a public company. It's not something we can run for ourselves or our whims." Power player with humble origins With a $4.6 billion sales price, it's obvious that Florida Rock is a major public corporation. Florida Rock, which had $1.37 billion in sales last year, produces construction aggregates, such as sand and crushed stone, used for buildings, highways and other projects. The Jacksonville-based company has major operations in Florida, Georgia and the Washington, D.C., area. And it's one of the dominant companies in the Florida market, which made it attractive to Birmingham, Ala.-based Vulcan. Florida Rock ranks second in the state behind Rinker Materials with a 20 percent share of both the aggregates and cement markets, according to a recent research report by Goldman Sachs JBWere. And it all started more than three quarters of a century ago with a sand pit in Interlachen. The late Thompson Baker, John's and Ted's father, got started in the construction materials business in 1929 by purchasing his father's repossessed pit from the bank. In 1932, he formed Florida Rock's predecessor company by joining with Gainesville competitor Jim Shands to form Shands & Baker Inc. Thompson Baker left the business to join the Marine Corps in 1942. But after World War II, he returned and began growing the business as Florida grew. Shands & Baker merged with two other companies in 1972 to form Florida Rock, and it became a public company run by the Bakers. In 1986, Florida Rock spun off its transportation and commercial real estate operations into a second public company now known as Patriot Transportation Holding Inc. The Bakers currently own 44 percent of that company, with Ted serving as chairman and John serving on the board of directors. Ted's son, Tom, is also a board member. The Vulcan-Florida Rock merger is expected to have no impact on Patriot. "Our game plan remains the same," Patriot President and CEO John Anderson said last week. Respected in the community Thompson Baker officially retired from Florida Rock in 1989 but remained as chairman emeritus, going to the office every day until his death at age 91 in 1997. But he left the business in capable hands. Ted and John have impressed the business community over the years not only with their business skills but also their style. "These are two of the most honest, down-to-earth, soft-spoken individuals you'd ever want to be around," said Fidelity National Financial Inc. Chairman and CEO Bill Foley, who sits on Florida Rock's board. "They ran just a terrific company," he said. "They ran a real lean operation that was a top performer for years and years." "Ted and John have an extraordinary amount of streetwise common sense, fabulous instincts and extraordinary people skills," said Hap Stein, Chairman and CEO of Regency Centers Corp. and a member of Patriot's board. "They're dedicated and love the business," he said. After the merger, Ted's son, Tom, currently a Florida Rock vice president, will become president of Vulcan's Florida Rock division, which will continue to be based in Jacksonville. John Baker will join Vulcan's board of directors, but he and Ted will have no executive roles with the company. John said he doesn't know what he's going to do next, but he expects his family to continue to be involved in the Jacksonville community. John said he's heavily involved with the YMCA and Ted works with the Police Athletic League, among other projects. Florida Rock has a foundation that allows its workers to get involved with community projects, and John doesn't expect that to change. "A company doesn't do anything. It's people that do things," he said. But John said it's going to be strange for John and Ted to give up management of Florida Rock. "It's a big case of mixed emotions. It's what we've done all our lives," he said. mark.basch@jacksonville.com, (904) 359-4308