La Coop fédérée and Maizex Seeds, fresh off of entering into a joint venture agreement, know what it takes to build and maintain a strong business partnership.
Striking a partnership deal with another company — and making it last — can be difficult if divergent business cultures collide and there isn’t close alignment on corporate practices, goals and vision.
La Coop fédérée and Maizex Seeds, two major players in the Canadian seed industry, know this very well. The two businesses recently entered into a joint venture partnership, and for them, the question of whether it was the ‘right fit’ was an easy one to answer.
“To be honest, it’s been an easy transition because we are ultimately on the same page,” says Dave Baute, president and CEO of Maizex Seeds. “We both sincerely have the best interest of our farmer customers in mind. If they make money and are successful then so are we, and it’s a very simple equation.”
Maizex Seeds is a corn and soybean seed company located in Tilbury, Ont., while Montreal-based La Coop fédérée, which produces and markets seed for soybeans, corn, cereals and forages under the Elite brand, is one of the nation’s largest agri-food companies with numerous operations across Canada.
The new partnership will enable La Coop fédérée and Maizex Seeds to build a broader national presence and generate new efficiencies aimed at providing new and better seed offerings to Canadian farmers.
The companies are also working on a comprehensive market strategy to provide full product access and support to growers around the country. One of the first priorities is moving all of the corn offerings under the Maizex brand, while all soybean offerings will be sold under the Elite brand.
Casper Kaastra, crop production general manager for La Coop fédérée, was one of the key architects of the deal.
“The timing was right for both organizations,” he says. “We both had the same objective of an expanded presence to build up our business from a solid foundation, but in order to be a long-term player in the Canadian seed industry, particularly with corn and soybeans, we both realized that we needed to take the business to another level.”
Baute agrees: “La Coop fédérée is the ideal partner for Maizex, not only given their ownership and shared values, but also their shared vision to invest in the scale and scope of [the] seed business needed to service Canadian farmers.”
Both companies are farmer-owned, are consensus-builders, and share a strong commitment to the Canadian seed market, Baute says, and have other shared values that include honesty, respect and integrity.
Stephen Denys, director of business management for Maizex Seeds, maintains the two companies are compatible in many other ways as well.
“In this case, they’re extremely complimentary to each other in terms of footprint, in terms of skillsets, and in terms of areas of expertise, so it was kind of a natural to put these two businesses together,” he says.
Denys notes that strong relationships already existed between the leadership of Maizex Seeds and La Coop fédérée through each company’s involvement with the Canadian Seed Trade Association and other industry organizations, and that this familiarity helped seal the deal.
Find the Right Partner
Kaastra points out that La Coop fédérée has had positive results with similar partnerships in the past.
“To have a good success with a joint venture, it’s important to find the right [partner] that’s focused on success, that’s focused on growth, and that’s focused on creating value,” he says.
“The second piece is [to ensure] there’s a good cultural fit between those individuals and your organization. Just because somebody might be focused on growth and creating value and success doesn’t necessarily mean that they do that in the same manner that another individual would, and that really speaks to the values and how the business operates and the culture of the organization,” Kaastra adds.
“The third piece that’s pretty important is recognizing each other’s function within the partnership. Both parties have a role to play, some more than the other depending on what the function is, and each party needs to clearly identify what this is so there are no surprises. … Each party has to be a contributor, each party has to bring something to the equation, and then the other party has to have confidence in that other individual.”
Don’t Forget the Legalities
Kaastra says having a formal framework that defines how the partnership operates as well as clearly-defined business and financial plans and organizational structures in place are a must in any successful joint venture.
“The documentation that governs the partnership, in our experience, is extremely important,” says Kaastra. “People can change over time, so you really need to have a structured approach.”
Baute agrees, stating it’s always essential to get excellent counsel on legal, accounting and other matters when entering into agreements like this.
“You need to have some very good advice every step of the way, especially in terms of thorough due diligence and completing all the signed documents like the shareholders agreement, the purchase agreement, all those types of things. I can’t overstate that — it’s the foundation of what your relationship is going to proceed forward, and if you didn’t do a good job of that, you’re setting yourself up for a lot of angst,” he says.
“You’re not going to be able to do a deal unless you basically have all your ducks in a row.”
Tips for a Successful Partnership
Respect
Dave Baute, president and CEO of Maizex Seeds, believes companies that don’t have a high regard for each other really shouldn’t go into business together. As he points out, that certainly wasn’t the case when Maizex Seeds and La Coop fédérée were hammering out their deal.
“We have mutual admiration and respect for each other, and that’s the secret,” Baute says.
Trust
Stephen Denys, director of business management for Maizex Seeds, considers trust to be the linchpin for any successful business partnership, and he believes good personal relationships are the key to building that trust.
“There’s always speed bumps in the road in a journey like this, and those relationships really smooth out and make it much easier to develop goals and objectives and build a team that can achieve them,” says Denys.
Communication
Denys maintains communication is critical when business partnerships become public.
“Communication is job No. 1,” he says, “It’s about having timely, effective and constant communication with all the various levels within the organization as well as with external distribution partners and the customer base, so that everyone knows what we’re doing and why.”
Things like respect, trust and communication can also be equated to a successful marriage, and Baute, for one, feels it’s a valid comparison.
“It’s that level of trust and caring and sharing dreams and visions, similar to a marriage,” he says. “It’s a good analogy.”
