The Upside of Selling Your Produce Business

Grow, grow, grow is the far-reaching goal of this industry, whether in your fields, in your warehouse, or on your shelves. There is no faster or better way to grow than through mergers and acquisitions.

We sold our company in July 2022, and have benefited tremendously from taking this step. Becoming part of a larger family of companies will not only offer rock-solid security to your business, but will also create opportunities for your employees and customers that didn’t exist.

Many things are changing in this industry right now, and one thing that we all will always benefit from is volume. Strategically related entities, without adding a single customer, become instantly more valuable once linked, creating a one plus one equals three, or sometimes more, scenario.

Many things are changing in this industry right now, and one thing that we all will always benefit from is volume.

Mutual buying power leads to greater negotiating leverage, and any existing customer concentration diminishes within a larger portfolio. There are countless privately owned companies, as well as private equity firms looking to expand in the fresh produce industry, who may be interested buyers of your business.

The chief executive of Native Maine Produce (backed by RLJ Private Equity firm) Vinnie Caliendo says, “We prefer for the top leadership to remain, but also look for companies that have a bench of competent management that can run the business on a daily basis without top management calling all the shots. We look for the senior folks who understand accrual accounting is part of their future, whether they are doing it themselves or not. Joining a larger organization affords many benefits to the sellers, cashing in on wealth creation, or having other like-minded folks that appreciate the combination is stronger than the individual parts.”

This team will have the opportunity to work on more challenging and fulfilling work.

The most exciting part of joining a portfolio of companies is watching employees upskill and identify paths toward growth that otherwise wouldn’t exist. Opportunities arise to synergize intercompany growth, develop a deeper and broader org chart to solidify the foundation you will build upon, enhance your financial insights and outputs, as well as to create new positions that the company previously did not need.

Jimmy Davolio, president of Native Maine, shares his experience on watching his team grow from being a stand-alone entity to a multi-location company: “Being able to capitalize on the mutual strengths of a portfolio company is not only profitable with revenue opportunities, but also with people. We saw better pricing due to the combined buying power and more consistent quality. We also saw the benefits of people with long and varied experience working together to optimize results. Lifetime employees have really embraced the growth opportunity in front of them, and the growth of both our people and profits proved to be a perfect outcome.”

Positions, once filled with a revolving door of personnel, suddenly stabilize with folks who want both you and the company to succeed. The challenges faced will shift from how to maintain the day-to-day infrastructure, to looking weeks, months, and years ahead, committing to what you ultimately want the company to look like, and strategically working toward that big picture vision.

Our company has certainly become a more attractive and exciting place for talented workers, with genuine upside potential. The change in company culture has been the single greatest improvement we have experienced.

The process of approaching a sale can be an emotional one, as well as quite time-consuming. However, by working with the right team, you will save yourself a lot of wasted time. Even if you are not quite ready yet, it is always good to get your ducks in a row and operate your business as if you are going to sell.

If self-representation feels overwhelming, there are advisers out there who can prepare you to make your process a smooth one. These advisers know the ins and outs of the process to maximize efficiency and organization, as well as your valuation.

We ask countless questions when buying a box of lettuce — imagine the number of questions you will be asked by those buying your entire company.

Andy Buchholtz, president, A. Buchholtz & Co., in New York, says, “Entrepreneurs often think that they don’t need help when selling their business. No matter who you are, the value of preparing high-quality, professional, descriptive materials, presenting the financials of your business in the best light, and reaching out to what may amount to hundreds of buyers on a confidential and anonymous basis by an experienced third-party, should not be underestimated.”

Selling our business has offered incredible opportunity and security. As an industry peer, I am happy to serve as a resource if you are contemplating taking this professional step. There is a high likelihood it will strengthen the future of your organization in ways you haven’t even thought of yet.

Maria DeSarbo is president of Carbonella & DeSarbo Inc., a regional wholesaler based in Branford, CT.