April 18, 2019

Clearview Capital Fund III  portfolio company Wilson Orchard & Vineyard Supply (Wilson) has merged with Oregon Vineyard Supply (OVS) to operate under the new name, OVS. Financial terms of the deal were not released.

Having been in business for 31 years, and with 10 locations in Washington State, Oregon, California, and New York, as well as an e-commerce platform, Wilson is a leading provider of orchard and vineyard supplies. Over the course of its life, the  company has built up strong relationships as a value-added partner to apple, grape, cherry, hop, and berry growers.

Wilson will be joining OVS, which was founded in 1985, and is a provider of vineyard and agricultural supplies, equipment, and services through its seven locations across Oregon and Washington state. Since 2008 the company has been ESOP-owned (employee stock ownership plan), and similar to Wilson, has developed a deep standing serving grape, berry, nut, hops, and orchard growers.

“We have always admired OVS as a highly complementary player in our market, and are thrilled to join forces with them and offer a broader array of solutions to our customers, becoming even more of a one-stop shop,” said Joe Perry, CEO, Wilson.

“We are equally excited to be partnering up with Wilson,” added Matt Novak, CEO, OVS. “Joe and I began talking about the possibility of merging early in 2018, and the more we spoke about it, the more obvious it became how complementary our two organizations are, not only from a customer and product standpoint, but just as importantly from a cultural perspective.”

The merger will bring together two companies that are highly complementary, but have minimal overlap, leaving the combined OVS to launch from a position of strength.

“…OVS offers valuable agronomic solutions that we haven’t offered before. And its vineyard management division, Results Partners, is very highly regarded,” said Perry. “On the other hand, OVS hasn’t offered irrigation products and solutions before so that is an offering we will be able to deliver to their customers. Our overlap is minimal but our opportunities are plenty.”

As the deal is a 50:50 merger, the management teams from both companies will remain in place, and each team will own equity in the company alongside Clearview Capital.

“OVS represents Clearview’s first acquisition of an ESOP-owned company,” said Calvin Meider, co-founder and managing partner, Clearview Capital. “It was a learning process for us, as this ownership structure brings a set of unique challenges and opportunities. The OVS team was great to work with throughout the process. We would welcome the opportunity to work on more situations like this one in the future.”

Ripe for Consolidation

This merger of two leading orchard supply and service companies runs hand-in-hand with ongoing consolidation in the agricultural sector they serve.

As far back as the end of December 2017, industry watchers were noting that the Washington State tree fruit sector was set for a shift toward consolidation.  With an oversupply of both cherries and apples, and crowded with too many packing houses, Michael Butler, CEO of Cascadia Capital in Seattle, said that the tree fruit industry was bound to see a higher level of consolidation over the coming 24 months, as packing houses were running below capacity.

Most recently, in January of this year, North Carolina-based ag investment firm International Farming Corporation (IFC) acquired three Washington State tree fruit companies: Legacy Fruit Packers, Valley Fruit, and Larson Fruit. The three companies that were owned by the Larson and Verbrugge families were then consolidated to create a single new company, Columbia River Orchards.

Butler went on to note that mid-sized fruit companies with orchards smaller than 1,500 acres that are not vertically integrated, and are running at or below 30 percent capacity, are at the highest risk of being swept up through consolidation, reported Capital Press.

“They all have potential but there’s not room for all of them,” he said.

-Lynda Kiernan