Just two years after Jonathan Saperstein purchased TreeTown USA from his father, the 30-year-old CEO made another deal. TreeTown USA acquired Village Nurseries, a California grower, in a deal announced at the end of September.
The acquisition gives TreeTown USA more than 4,000 acres on 16 farm locations throughout California, Florida and its home state of Texas. Read more about TreeTown USA’s growth strategy in our April 2017 cover story: http://bit.ly/TreeTownUSA.
We spoke with Saperstein about the impetus behind the acquisition and how he’s handling the integration of a 900-acre production facility.Nursery Management: What attracted you to Village Nurseries? Jonathan Saperstein:
In any type of acquisition, there has to be a cultural fit. When we first started taking a look at them during our due diligence process, that was a big focus for us. Village Nurseries is a more than 40-year-old company with an excellent management team, and it really fit like a glove with the culture we have at TreeTown USA.NM: Were you looking to expand to the West Coast or did this acquisition come about another way? JS:
California has always been a market that we’ve been interested in entering. When you combine that with our Texas and Florida operations, it will help us diversify our operations and become more of a national presence. However, we weren’t out there seeking an acquisition. This was something presented to us as an opportunity. Once we started to look at it, we realized it was an opportunity we couldn’t pass up.
There’s a lot that goes into it. Village Nurseries has been around a long time and has a great management team. It’s not something we need to come in and change. We’ll take our time to fully integrate the companies. They will continue to operate under the name Village Nurseries as our West Coast division, with the same leadership team in place.
From a systems perspective, and really the rest of the integration process, we’ll work through that on our pace without disrupting our customers.NM: TreeTown is known for data tracking, the ability to know the cost of everything you produce. Do you anticipate incorporating that system with Village Nurseries? JS:
Yes. In order to do that, we’ll have to implement our ERP system. They do have a system at Village Nurseries that is perfectly fine. It’s able to produce accurate numbers and provide a good sense of the business. However, over the next few
We are adding roughly 900 acres of production capacity to our current operation, so it is a significant increase, but the biggest difference is driven more by mix. Village Nurseries produces significantly more shrub material,
Yes, and that’s one of the most exciting
They’re a little bit more seasonal than we are. But in reality, that’s another item both companies have that is
NM: What are the challenges of operating in that way, and what are the advantages of making it work? JS: There are a lot of advantages to being able to offer employees full-time positions: not having to retrain employees, not having to bring people on with the understanding that this is a temporary job. By bringing everyone
When you look at it from a seasonal perspective, there are some benefits. You can mirror your costs closer to your revenue. You do have to go through a very difficult process of a big spring surge when you must hire huge amounts of employees for a relatively short time. That can be a challenging process.NM: Will the VN staff be staying on? JS:
We plan to retain the vast majority of the employees. In a lot of these acquisitions, companies have learned to paint in a light that tries to make it look as positive as
It’s an exciting time for both companies. We’re a much younger company than Village, but