A week after the announcement that Syngenta signed an agreement to acquire Goldsmith Seeds, the industry is still buzzing with questions: How will this affect Goldsmith’s customers? employees? the industry as a whole?
The big reaction has been “surprise,” Goldsmith President and CEO Joel Goldsmith told GPNlast week. “We are getting a lot of surprise initially — from employees, customers and the industry — but after hearing the details and thinking it over, it makes sense.”
As part of the deal, Syngenta will pay $74 million, on a cash and debt-free basis, for the acquisition. Syngenta will maintain the Goldsmith brand in the market under the Syngenta Flowers umbrella. Goldsmith currently breeds, produces and sells a broad range of pot and bedding products, including major crops such as cyclamen, impatiens and petunia.
During these uncertain economic times, the agreement translates into a more secure future for the family business, Goldsmith said.
“It solidifies the future for our products and employees. This will allow us to do the things we want to do as a company without having to worry about unexpected hazards,” he said. “The best example I can give is what we went through with Ralstonia in 2003 and 2004. That was a known problem, with a minor bacteria, that got out of hand due to circumstances outside of our control. We not only lost millions of dollars, but we also lost our confidence that we would always be around. We saw a very real possibility that everything we had worked for could be gone.”
Although the agreement has been met with enthusiasm from both companies, Goldsmith told GPN, the decision to sell the family business is marked by “nolstagia and sentiment.”
“This was the hardest decision that our family has had to make regarding our company. My parents started from nothing. My brothers and I grew up working in the business every summer, and decided to make this our career,” Goldsmith said. “It is what we know, and is a significant part of who we are.”
As for Goldsmith’s employees — the heart of any business — not much is expected to change: “Because we are going to continue as an entity, under the Goldsmith name, by the way, all of our employees will continue to do the job they have been doing. It will also allow for even more growth, development and advancement opportunities for them,” Goldsmith said. In fact, employees who participate in the company’s Employee Stock Ownership Plan, a retirement plan through which employees own 20 percent of the company, will see a significant gain in their retirement portfolios, he added.
In a letter to industry partners, Syngenta Flowers President Gary Falkenstein acknowledged that the agreement would raise a lot of questions.
“To answer the most pressing, we assure you that Syngenta fully supports the open distribution channel through our broker networks and will keep those channels open for both Syngenta Flowers and Goldsmith Seeds,” Falkenstein wrote. “We would also like to assure you that this event will not change how we each fulfill this season’s orders — please continue to do business with Goldsmith Seeds and Syngenta Flowers, respectively, as you have in the past.”
The transaction is expected to close in the fourth quarter of 2008, pending regulatory approvals.
As with any acquisitions, change is inevitable, Goldsmith admitted:
“What they will be, we can’t say at this time, but the most important element is that we will continue to do the work we have always done. Our customers and the growers that use our products will be our focus, and we will continue the innovative work we have been doing since 1962.”
Goldsmith Seeds , headquartered in Gilroy, Calif., was founded in 1962. The Goldsmith family owns and operates the business, which has some 1,500 employees. The company has breeding and production facilities in Gilroy and production facilities in Guatemala. Reported sales in 2007-2008 were $50 million.
Syngenta Flowers , a worldwide leader in the pot and bedding plant industry, breeds and markets seeds, young plants and cuttings for the ornamental industry. In 2007, Syngenta reported flowers sales of $272 million.