Sakata Seed Corporation’s wholly owned South American subsidiary, Sakata Seed Sudamerica LTDA, announced an agreement to purchase all shares of Isla Sementes LTDA and Isla’s holding company, Administração E Participações Spalding LTDA for 63.5 million Brazilian real ($12.72M USD) as of December 2023, according to a release.
The agreement expands Sakata’s flower and vegetable seed portfolio and reach in Brazil. Currently, Sakata sells flower and vegetable seeds via its Sakata Seed Sudamerica LTDA subsidiary to medium and large-scale commercial growers in Brazil. Isla also specializes in flower and vegetable seed sales in Brazil, but to smaller scale, home gardener and smallholder farmers.
Sakata values the domestic gardening and smallholder farmer market in Brazil at approximately $20M USD. Brazil’s population of over 214 million people, and the fact the country is poised for future economic growth, mean Sakata sees upside sales potential in this market, according to the release.
“Through this acquisition, the two companies, which have little overlap in sales network, sales area, customer base, and product portfolio, aim to stimulate new customers and demand by leveraging their respective sales networks,” said the release.
“With the addition of Isla to the group, Sakata expects that the mutual use of sales networks will create synergies and further increase sales for both companies.”
Sakata expects to generate a combined sales increase of about $3M USD in five years from these synergies, according to the release, and anticipates being able to make more effective use of the two companies’ individual supply chains, production facilities and research capacity.
Isla’s portfolio includes varieties tailored to home gardeners and smallholder farmers. Additionally, they offer microgreen seeds and organic seeds, both specialities whose markets are expected to grow. Sakata may leverage its sales network to sell Isla’s products to a larger global audience. Sakata says it will keep the Isla brand after the acquisition.
