Springtime Means Deals are Blossoming
There must be something in the air because as soon as spring sprung this year, business transactions were popping up all around the industry.
Over the winter, there had been whispers that several different breeders/marketers might be on the selling block. Well, whispers became press releases and realities in the last week of March when Syngenta announced it was purchasing the Germany-based Fischer group for $67 million and Harry & David said it was divesting its Jackson & Perkins unit (see “Company Acquisitions Underway” on page 8).
Now everyone is waiting to see how the industry will react to these deals.
Impact In North America
How will Fischer USA fit into the Syngenta family and its S&G Flowers division?
According to the parties involved, the Syngenta/Fisher deal will not impact the operations at Fischer USA. On the day the deal was announced, GPN reached Fischer USA’s co-president Gary Falkenstein at Goldsmith Seeds where the company was preparing for Pack Trials. Falkenstein told us that in North America, “Fischer USA is going to remain Fischer USA. We are joining [Syngenta] as a totally independent company.” He said the company would report directly to Syngenta Flowers in Basel, Switzerland.
Fischer USA’s parent company should benefit from the sale, too. “Combining our varieties, cultivation knowledge and supply processes will enhance our service and support to all our customers, with whom we can now access exciting growth potential in flowers,” said Fischer CEO Josef Fischer.
As far as competing with S&G Flowers is concerned, Falkenstein said, “We’ll be separate businesses with the same owner you might say.” Falkenstein also said no changes in personnel were expected at Fisher’s Boulder, Colo., headquarters.
As a result of the sale, Syngenta will now have leading positions in the geranium, poinsettia and New Guinea impatiens markets. Robert Berendes, head of business development at Syngenta, said, “This [deal] will accelerate the implementation of our flowers strategy and strengthen our global leadership position.”
It will be interesting to see how this relationship evolves.
One Company, Two Separate Transactions
On the heels of the Syngenta/Fischer deal came Harry & David Holdings’ announcement that it was selling its rose-growing and wholesale unit, Jackson & Perkins, to two unaffiliated buyers for an aggregate of $49 million, of which $46 million is payable in cash at closing.
Jackson & Perkins’ new owners, horticulture investors Donald and Glenda Hachenberger, agreed to purchase the Jackson & Perkins brand, Web site, catalog and associated inventory. A private investment group purchased the company’s 3,200 acres, buildings and equipment in Wasco, Calif.
As this issue of GPN went to press, the Hachenbergers had not yet commented on the deal, but according to the Harry & David press release, the deal was to be finalized by the end of June. Bill Williams, Harry & David president and CEO, said the decision to divest Jackson & Perkins would allow the company to “focus on [its] core businesses and further strengthen [its] financial position.” He also said that none of the employees in Wasco would be immediately affected by the divestiture.
Other immediate changes in Jackson & Perkins operations have yet to be announced. Harry & David Holdings said it had agreed to continue providing certain transitional services, including agricultural and horticultural services, through the end of June 2007, certain wholesale operational services during 2007 and certain direct marketing operational services and rose fulfillment through the end of next year.
I am sure we will find out more about this transaction when we visit Jackson & Perkins during California Pack Trials later this month.
Looking Into The Crystal Ball
So, what does all of this mean? From what everyone is telling us, the purchase of these two breeder companies should be practically transparent to the growing community. Even though both companies have new owners, it is business as usual for both Fischer USA and Jackson & Perkins. But the question is this: What will be the long-term impact of these deals?
What can growers expect in the future? Will the pool of breeder companies continue to evolve or devolve? How will these transactions impact the market in the coming years? Will they have any influence on prices? How will product distribution be affected?
Are there any other deals out there waiting to be consummated? These are the questions I am sure will be asked in the coming weeks.
Stay tuned for answers.