Seed company soldSEEDS 2000 of Breckinridge, Minn., recently was acquired by an Australian company
By: Mikkel Pates, Agweek
BRECKENRIDGE, Minn. — After 40 years, Jay Schuler of Breckenridge, Minn., no longer is owner of a hybrid planting seed company — again. He and long-time associate Gerhardt “Gary” Fick have sold plant breeding company to an international player for the second time in their lifetimes.
Schuler, Fick and their financial partners together have sold SEEDS 2000 to NuSeed, a wholly owned subsidiary of Nufarm, of Melbourne, Australia. The parent company is publicly traded on the Sydney (Australia) Stock Exchange. The transaction was official on Nov. 30.
Nufarm Ltd. announced the acquisition price of $55.2 million. NuSeed already had sunflower breeding and marketing operations in California, Argentina and Australia before the purchase. Nufarm also recently acquired Super Seeds sunflower company in Serbia and had some existing U.S. investments in canola and sorghum.
While competing with the big chemical players in the specialty crops, Nufarm has no immediate plans to invest in the corn and soybean seed business.
“We’ll continue to sell those at SEEDS 2000, but we’ll work with other breeders for those products,” Schuler says.
“This is a bit emotional for me,” Schuler acknowledges. “I actually started in the hybrid seed business when I was in college.”
As the story goes, Schuler was in a genetics class when he realized what hybrids could do for farmers and for companies that development them.
“I was fortunate to team up with my one-time boss and good friend, Dr. Gerhardt Fick,” Schuler says.
Fick has been a sunflower breeder since 1971. He initially worked for the U.S. Department of Agriculture office in Fargo, N.D., and developed some of the first commercially available hybrids using the cytoplasmic male sterile and fertility restorer system.
Schuler, who grew up in an entrepreneurial farm and grain supply business, was a summertime worker for Fick.
A dozen companies
Schuler, now 59, and Fick, 69, were invested in a number of start-up companies together through the years. Schuler has been involved in a dozen companies.
Schuler and Fick’s first effort was SIGCO Research in 1977, which was sold to Mycogen to Lubrizol in 1982 and later was spun off by Mycogen, which was bought by Dow Chemical Co. Fick for a time continued with his Seed America Co., that bred sunflower and “blue corn” and later was brought into SEEDS 2000.
The pair were principle owners in SEEDS 2000 from the start. They started the company in 1992 and introduced the first sunflower hybrids in 1993. They introduced the industry’s first Clearfield NuSun oil hybrids in 2004, the first Clearfield confection hybrids in 2006, the first ExpressSun NuSun hybrid in 2008, and the first Clearfield “con-oil” hybrid in 2009.
As time went on, there were several employee-owners, including key executives. Three years ago, the regional owners sold 51 percent of the company to River North, a “boutique investment group” in Chicago that focuses on agricultural companies.
“They kind of found us,” Schuler explains.
The new investor-partners’ deeper pockets allowed the company to expand into foreign markets without relying on the personal guarantees.
“It made financing easier, rather than Jay and Gary borrowing money,” Fick says. River North allowed for more foreign travel and more aggressive marketing of hybrids to customers in emerging markets.
SEEDS 2000 has a good domestic business and its foreign footprint “exploded” in the past five years, the two say. The company has about 45 employees, of which five are partly or mostly involved in international marketing.
Nufarm, by contrast, has some 3,000 employees in more than 30 countries. Nufarm mostly is involved in agricultural chemicals, and is planning to keep its seed business separate.
“But they offer ‘feet-on-the-street’ help with country knowledge, things like letters of credit,” Schuler says. “They’ll build on our base. They have one seed guy in Europe, in Austria.”
Schuler says it appears the company will keep all of its current SEEDS 2000 employees and probably will hire more.
The best suitor
Schuler quotes SEEDS 2000 President Steve Kent, who has said that “of all the potential suitors, this is the best match we’ve seen come across for SEEDS 2000 employees.”
The world is the expansion hope for the company. SEEDS 2000 also sells corn and soybeans, but sunflowers always have been a special expertise.
The U.S. grows about 2 million acres of sunflowers, but the global crop is about 60 million acres. SEEDS 2000 has three doctorate-level plant breeders in Breckenridge and a breeder in Argentina. The company’s genetics are sold throughout the world.
Fick has played a key role in developing varieties and has made the company a dominant player in certain hybrid classes, especially in confections. China is the biggest market in the world. Fick’s genetics are involved in 70 percent of the confection sunflower acres grown there.
Schuler explains that it was “challenging and an absolute blast” to promote the products throughout the world. But he had been spending three months a year overseas, and could have spent six months a year traveling. The company also attracted a parade of foreign visitors across the years, often hosting them for dinner at the Wilkin Bar and restaurant.
“For us, August and September was like being in the United Nations,” Schuler says. ”Which foreign visitor is coming today?”
He doesn’t think that’ll change. And he’ll probably be busier than ever, at least for the next six months.
Both will stay on for at least a year or two in transition roles. Neither expects to retire completely. The SEEDS 2000 brand isn’t likely to disappear and there are no plans to bring in outside leadership.
“I’m committed to the transition,” Schuler says. “A lot of our customers are friends. This has been our baby, so I want to make sure I can help make things smooth and make the company grow.”
Separately, Schuler continues as president of Giant Snacks Inc., of Wahpeton, but currently doesn’t exercise day-to-day control. That company has averaged 20 percent annual growth in the past five years and is in more than 50 percent of convenience stores in the Upper Midwest. The company has sales of more than $10 million. Schuler and a brother, Tom, are co-owners with Schuler’s sons, Jason and Robert, who are in sales and marketing for the company.
Fick and Schuler are among the owners of Richland Organics, which supplies edible soybeans and organic blue corn, developed by Fick. Their company Blue Corn Co., supplies product to Richland Organics.
Among other things, Schuler says he wants to help encourage other would-be entrepreneurs.