August 17, 2018

Open Prairie announced the first investment made through its Open Prairie Rural Opportunities Fund since the fund secured its license from the United States Department of Agriculture (USDA) to operate as a Rural Business Investment Company (RBIC) in January of this year.

As a maiden investment, the Open Prairie Rural Opportunities Fund committed $5.2 million to Tillerman Seeds, a Michigan-based seed company focused on non-GMO product lines.

Founded in 1997 and headquartered in Effingham, Illinois, and with offices in Champaign, Illinois, Kalamazoo, Michigan, and Olathe, Kansas, Open Prairie is a private equity management firm with a goal to increase the availability of capital for underserved markets.

Upon the fund’s launch in 2016, Open Prairie partner and vice president Jason Wrone said in a USDA press release “We live, breathe and believe strongly in rural America and are pleased to be working with USDA, the Farm Credit System, and other entities that share our passion for building successful companies that have a meaningful impact on their respective business sectors and the communities in which they do business.”

Concurrently, the fund also announced a successful first close on $55 million in commitments led by institutions within the Farm Credit System, family offices, commercial and community banks, farm organizations, and individual agricultural investors. Of this total, CoBank has committed $7.5 million.  

With a target of $100 million, the Open Prairie Rural Opportunities Fund was established as a vehicle geared to capitalize upon global macro trends including projected world population growth to 9 billion; a 70 percent increase in caloric demand; and crop demand growth of more than 100 percent by 2050.

Within this framework, the fund is structured as a balanced private equity vehicle offering debt and equity capital of between $2 million and $10 million to growth and later-stage companies within the food and agribusiness value chain.

Funding Expansion

This backing from Open Prairie enabled Tillerman Seeds to continue to pursue its strategy of regional acquisitions, completing a deal for Wisconsin-based Legacy Seeds, a leading producer of non-GMO alfalfa, corn, soybean, wheat, turf, and cover crop seeds.

“The Open Prairie team brings significant value to Tillerman Seeds as we accelerate our agribusiness platform,” said Remos Lenio, partner in Tillerman & Co. “They have a strong understanding of the industry and the growing momentum for experienced investors to contribute to global demands and dynamics.”

The addition of Legacy will bring Tillerman access to the company’s operations in Nampa, Idaho. Tillerman also recently acquired DF Seeds, a rural Midwest-based soybean and wheat seed company that has operations in Michigan, Wisconsin, and Idaho. Together, Tillerman and DF have created a Midwestern seed company that generates nearly $40 million in annual revenue through serving more than 800 farms.

“Open Prairie is looking forward to working closely with Tillerman Seeds as they leverage operational expertise within Legacy Seeds and DF Seeds to create new market channels, research and development collaboration opportunities and implement strategic growth initiatives with its customers, employees and suppliers,”  said Jim Schultz, founder and managing partner of Open Prairie who as part of the transaction will join the Tillerman Seeds Board of Directors.

Moving forward, Tillerman plans to operate Legacy Seeds as a standalone entity, as it has operated DF Seeds since its acquisition in October 2017. However, all entities will collaborate with each other on R&D, and best practices for customer service, marketing, and cross selling of product lines.

-Lynda Kiernan