BOISE, Idaho – The J.R. Simplot Company, a privately held agribusiness corporation with revenues derived principally from fertilizer manufacturing, agriculture, food processing and related businesses, announced August 4 that it has finalized the purchase of some of two separate turf-related companies' assets to increase the company’s hold in the turf market. The company has purchased assets from AgriBioTech (ABT) and Eco Soil Systems Inc. (ESSI).
Both acquisitions will become part of Simplot (Turf & Horticulture), the turf and horticulture group of the agribusiness corporation with seed and fertilizer divisions. The divisions before the acquisitions in Simplot (Turf & Horticulture) included Professional Products (BEST® and APEX® fertilizer lines) and Jacklin Seed®.
AGRIBIOTECH. Simplot has purchased the turfgrass seed and specialty distribution assets from AgriBioTech™ Inc. (ABT). The deal was negotiated through ABT's court-appointed reorganization consultant, Development Specialist Inc. (DSI) following ABT’s Chapter 11 bankruptcy filing Jan. 24, 2000. The ABT purchase had been bid by both Simplot and Kenneth Budd, former president and chief operating officer of ABT, as of May 2000 with a speculative announcement by ABT that Simplot had won the bid (see J.R. Simplot, Former Owner Bid For ABT). However, the purchase by Simplot is now official, according to the company.
Terms of Simplot's transaction include the production and marketing rights for a number of turfgrass seed varieties, various international production contracts as well as ownership of several distribution locations. The seed varieties include:
- L-93 creeping bentgrass
- Southshore creeping bentgrass
- Jamestown II chewings fescue
- Jaguar 3 turf-type tall fescue
Additionally, Simplot has acquired the distribution locations of Garden West, Phoenix, Ariz.; Hill of Kentucky, Florence, Ky.; and Las Vegas Fertilizer, Las Vegas, Nev. Simplot has also acquired the rights to a number of trademarks product lines such as Signature™ bentgrass blend and Pinto™ wildflowers mixtures.
"We are extremely pleased to acquire seed varieties and distribution locations of this caliber," said Simplot (Turf & Horticulture) President Bill Whitacre. "Proven and well-respected varieties such as L-93 bentgrass compliment and further strengthen our already strong turfgrass program of bluegrasses, ryegrasses, fescues, Bermudas and zoysia. It's a natural fit for many ABT varieties to be marketed by the Jacklin Seed® division of Simplot (Turf & Horticulture) due to our global influence."
ESSI’S TURF PARTNERS. Also announced by Simplot August 4 is the completed acquisition of Turf Partners from ESSI, a manufacturer of chemical, fertilizer and seed products for turf and crop maintenance. The nationwide distribution channel will immediately take the name Simplot Partners.
Formerly the exclusive distribution arm for ESSI, Simplot Partners will continue to function as a full-service distributor supplying proprietary and traditional turf maintenance products from a variety of industry suppliers.
According to Whitacre, "Turf Partners has an excellent managerial and sales team. As a whole, I believe the golf industry appreciates the level of commitment Turf Partners brought. A change of name to Simplot Partners will only bring more value and financial support to clientele."
"Independent distribution will remain an important channel for Simplot products. All distribution will be treated as independent businesses," continued Whitacre. He said Simplot will continue to focus energies in working with and supplying Jacklin Seed, former Medalist America®, BEST and APEX products to their existing independent, regional distributors. "Our distributors are the reason we are successful. It will be our obligation to earn any distributor's business – whether they are private, independent or owned," he said.
According to ESSI, Simplot purchased Turf Partners' (now Simplot Partners’) assets for a total purchase price of $61.5 million that included a cash payment of $23 million and the assumption of Turf Partners' (now Simplot Partners’) bank debt and existing vendor payables totaling $38.5 million. Simplot also assumed substantially all of Turf Partners' (now Simplot Partners’) contracts and leases.
In addition to closing the sale, Eco Soil said the two companies have entered into two distribution and supply agreements:
- In the first agreement, Simplot agreed to purchase a minimum of $5 million of FreshPack™ product during the first two years of its five-year term.
- In the second agreement, Simplot agreed to perform a market test of Eco Soil's proprietary products in 10 of Simplot's SoilBuilders stores.
Eco Soil and Simplot also entered into a field trial agreement in which Simplot will commence field trials of Eco Soil's proprietary products on its potato fields.
After paying the costs related to the sale, repaying the $3 million working capital loan made by Simplot prior to completion of the asset sale and repaying outstanding long-term debt, Eco Soil expects to retain approximately $5 million of the cash proceeds for working capital purposes.
William Adams, Eco Soil's chairman and CEO said, "We expect that these distribution agreements and the field trials agreement with Simplot will enhance our proprietary product sales in both the agriculture and turf markets."
For more information about the above companies, visit AgriBioTech’s web site at www.agribiotech.com, Eco Soil’s web site at www.ecosoil.com or J.R. Simplot’s web site at www.simplot.com.
