By Lynda Kiernan
Colorado-based S&W Seed Company announced it has agreed to acquire Pasture Genetics – the third largest pasture seed developer in Australia – in a deal valued at US$13.5 million.
As part of the deal, Pasture Genetics founder Rob Damin will join S&W in the role of commercial general manager – Australia.
Founded in 1980, S&W is a global supplier of a range of forage and specialty crop products that support the growing, worldwide demand for animal proteins and health-conscious food options. The company has significant R&D, production, and distribution capabilities, and is a leader in proprietary alfalfa and sorghum seeds. Its portfolio also includes hybrid sunflower and wheat seeds, and is currently in the process of leveraging its research and breeding expertise to develop and produce stevia.
Formed in 1997, Pasture Genetics is a leading pasture seed research, breeding, screening, evaluation, and distribution company. Its R&D division operations form a facility at Penfield outside of Adelaide, South Australia, with 60 acres of irrigated red loam acres in the heart of the state’s agricultural region, according to the company website.
The addition of Pasture Genetics will broaden S&W’s portfolio in Australia, adding alfalfa, medic, clovers, vetch, forage cereals, as well as pasture and other grasses, including its proprietary Goldstrike® seed coating technology, which addresses rhizobia inoculation and extends shelf life – two key market advantages.
“Australia is a major producer and exporter in the global agribusiness market,” noted Damin. “At Pasture Genetics, we have built our reputation as a leading participant in this market. Our skills and resources align with the strength and reach of S&W’s operations in ways that we anticipate will enable the organization to rapidly service demands for new product offerings for customers both in Australia and overseas. We are incredibly excited about the future.”
These additions to the S&W product offerings also move the needle for S&W in regard to its goal to become one of the leading suppliers of elite seed genetics to Australia’s farmers.
“We believe the acquisition of Pasture Genetics will broaden our product portfolio and sales capabilities within Australia, a market where we have built out a significant presence as a provider of elite seed genetics,” said Mark Wong, CEO, S&W Seed Company.
“It also is expected to further enhance utilization of S&Ws existing assets which we believe will drive incremental value for us in the years to come. Pasture Genetics’ product portfolio complements our existing sorghum, alfalfa, sunflower and wheat products, furthering our objective of being a one-stop supplier of elite seed genetics to Australian farmers.”
A broadened portfolio is only one synergy S&W expects from this deal. The company also anticipates the acquisition to expand its sales reach, as Pasture Genetics’ sales team touches significant additional customer bases and geographic markets in Australia. Pasture Genetics also offers strong cross-selling opportunities and brings relationships with leading Australian retail channels.
The acquisition of Pasture Genetics’ Goldstrike® seed coating technology will also prove advantageous when applied to S&W’s existing production line, adding value and improving pricing power.
And lastly, S&W anticipates cost savings in administration and operations resulting from the integration of the two companies.
“We believe there are a number of synergies available as we combine Pasture Genetics and S&W,” said Wong.
“There is little crossover between the sales organizations, presenting significant cross-selling opportunities between our customer bases, and we expect to leverage S&W’s existing infrastructure for a number of operational functions.”
“We also believe,” continued Wong, “…that Pasture Genetics’ Goldstrike® seed coating technology can enable gross margin expansion as we look to apply the premium seed treatment to other products in our portfolio. Strategically, the acquisition of Pasture Genetics should also increase S&W’s retail store distribution, where S&W has excellent relationships with key chains.”
– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.
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