SDR Ventures Advises Hollandia Produce on its ESOP Transaction, Co-Led by Mosaic Capital Partners and The SEAM Fund
ESOP deal empowers employees and preserves founders’ legacy
DENVER – January 14, 2016 – SDR Ventures, a nationally recognized investment bank for privately held businesses, is pleased to announce that Hollandia Produce, L.P. (“Hollandia Produce” or “Hollandia”) has implemented an Employee Stock Ownership Plan (“ESOP”), with structuring and funding co-led by Mosaic Capital Partners, LLC (“Mosaic Capital Partners” or “Mosaic”) and The SEAM Fund (“SEAM”). SDR Ventures served as Hollandia’s transaction advisor throughout the process.
California-based Hollandia Produce is a leading producer of greenhouse-grown leafy greens, and has built a strong reputation around its production of Live Gourmet® brand butter lettuce as well as Grower Pete’s Certified Organic brand butter lettuce and watercress. As Hollandia’s exclusive transaction advisor, SDR Ventures was able to help Hollandia capitalize on its unique growing and packaging process and its high growth potential. SDR utilized its extensive consumer-products network to locate two qualified investors in Mosaic Capital and The SEAM Fund, each of which fit the financial and ESOP-related goals of Hollandia.
“The desire to create an ownership opportunity in Hollandia for our 150 employees was always top-of-mind for us. Our employees are what make our company so successful,” said Hollandia CEO Pete Overgaag. “The SDR team was able to locate and engage the perfect partners for us and smoothly guide this complex transaction. SDR’s commitment to our goals never wavered. We’re proud to know that our employees can now say they hold an even deeper stake in our company.”
Mosaic Capital Partners, a private investment firm providing mezzanine debt and equity to lower middle-market companies, was a clear fit for the transaction due to its unique experience in consumer products and expertise in facilitating ESOPs. In addition, Mosaic’s stated strategy of “partnering with quality management teams at sound companies in stable industries to help drive value growth” was well aligned with Hollandia’s reputation and goals.
Mosaic Principal Ian Mohler stated, “Our team at Mosaic was honored to be selected as a partner to Pete Overgaag, the management, and employees in Hollandia’s transition to employee ownership. Hollandia is a leading grower of hydroponic lettuce, and we are big believers in the tailwinds behind the hydroponic lettuce category. We look forward to supporting the Company’s numerous growth opportunities throughout the life of our partnership, and we’re thankful that SDR Ventures approached us with this opportunity.”
The SEAM Fund, an affiliate fund to Endeavour Capital’s private equity funds, was formed to provide flexible growth and mezzanine capital to leading middle-market companies in the western United States. SEAM’s regional focus and investment capital solutions for employee stock ownership plans were strong matches for this transaction.
“With our focus on investing in strong companies headquartered in the Western U.S., Hollandia stood out immediately,” said Iain Douglas, Managing Director and Co-Founder of The SEAM Fund. “Co-investing with Mosaic afforded both firms the ability to participate in a vibrant, growing company. We’re excited for what’s next.”
By securing two private investments and creating an ESOP, Hollandia was able to empower its employees with company ownership while positioning itself for future growth. “We now have private investment in the company and have the ability to transform the company into an ESOP,” Overgaag added. “Our unique position will allow us to take advantage of new opportunities to expand and grow the company.”
From SDR’s perspective, this one-of-a-kind transaction helped ensure that Hollandia is in great hands and that the Hollandia management team’s goals were met.
“We were extremely pleased to be a part of this transaction,” said SDR Ventures Managing Director Travis Conway. “Not only is Hollandia a very successful and growing company that produces highly innovative consumer products, but the structure of the transaction is especially fulfilling because Pete Overgaag and his team are now able to share their legacy with the Hollandia employees. We’re thankful for Mosaic and The SEAM Fund’s desire to facilitate the ESOP as well. We expect transactions of this nature to increase in popularity in the coming years because they are very appealing for business owners who want to ensure that their companies are in great hands from both a financial and ownership standpoint for many years to come.”
Founded in 1970 in Carpinteria, California as a fresh-cut flower producer, Hollandia has evolved over the past 45 years into a prominent regional rooted-greens producer with numerous highly specialized, hydroponic greenhouse facilities. Its Live Gourmet family of products are harvested with their roots intact, and the lettuces are packaged in unique “clamshells” that essentially function as miniature greenhouses. As living plants, these products are able to maintain long-lasting freshness and retain flavor and color much longer than comparable varieties.
About SDR Ventures
SDR Ventures is a Denver-based investment banking firm serving private business owners in the lower middle market, including companies with values up to $300 million. SDR offers transaction advisory, private capital formation and business consulting services across a wide range of industries including the food and beverage industry. The SDR Ventures approach of “Thinking Like Owners” helps businesses maximize their value.