Ag Co-Ops Finalize Merger
The boards of directors and members of two Indiana agricultural cooperatives have formally approved a previously-announced merger. Avon-based Co-Alliance LLP and Harvest Land Cooperative, headquartered in Richmond, say the merger will officially take effect on February 1.
The deal was first announced in August. Together they will operate as Co-Alliance Cooperative, headquartered in Avon.
“Co-Alliance Cooperative brings together two extremely strong cooperatives with a successful history of servicing member-owners at the highest level. I anticipate this strong combination will provide synergies and resources that will enhance our customers’ experience and prepare us to meet the needs of our future stakeholders,” said Kevin Still, who is the current president and chief executive officer of Co-Alliance and will serve in that capacity in the new venture.
Current Harvest Land President and CEO Scott Logue will become executive vice president in the new cooperative.
While the merger will officially take place next month, executives from both co-ops say the deal has been in the works for years.
“These talks actually started back in 2011. And they progressed and you know how these things take time. And finally, this last summer, we really got down to talking and fortunately here in January the first couple weeks, our boards voted, and our shareholders voted unanimously almost to approve this merger,” said Still.
Still and Logue say the companies individually had strong balance sheets and no long-term debt, so together they have more negotiating power and can provide a return to its members.
“As we stand today, we were determined to keep a strong equity redemption and patronage payment program to our shareholders,” Still said. “And you know, we really think with the savings and synergies that we get with the new company, will maintain a good income and we can maintain that patronage.”
Logue added, “This historic merger creates a cooperative that can proactively navigate the ever-changing industries we service and provide an environment in which our customers and employees thrive.”
The newly formed cooperative services customers in Indiana, Ohio, Michigan & Illinois. Logue says there was very little business overlap in coverage areas.
“And where we did have some overlap there in Central Indiana, we had a very successful joint venture that Co-Alliance and Harvest Land had worked together since 2001 and operated that joint venture so that that relationship goes back nearly two decades,” said Logue.
It has four core divisions, including Agronomy, Energy, Grain and Swine & Animal Nutrition. Together, the new cooperative will have over 1000 employees and $1.3 billion in sales.
Co-Alliance CEO Kevin Still said co-ops need to scale, like many of their customers.