Central Valley Cooperative, Watonwan Farm Service Announce Plan to Merge
The boards of both Central Valley Co-op and WFS have voted unanimously on a merger plan. Each board will seek support from its members in a December vote.
In a news release, the two cooperatives report financial strength but indicate that studies show there would be significant value to their patrons if the cooperatives were to consolidate. The study involved the boards and management teams, as well as an independent consultant. The co-ops already work together in several partnerships and have been exploring the possibility of a merger for more than a year.
Central Valley board chairman Eric Schrader said, "The efficiencies and savings that were identified in the study could not be overlooked. Together, we would operate more effectively, creating greater value to our members than if we were on our own."
Watonwan Farm Service board chairman Charlie Johnson said, "So often mergers occur due to financial instability or to overcome weakness. This is not the situation with CVC and WFS; both cooperatives are financially stable. As the dynamics in agriculture continue to change, we want to bring the strengths of our cooperatives into a unified company that will thrive in the decades ahead."
The studies identified the potential for $5 million to $7 million in savings. If the merger passes, the combined sales would be in the range of $600 million. Other benefits include employee opportunity and retention, access to capital, risk management and geographic diversity.
The two companies cover adjacent trade areas and do not operate facilities in the same communities. There are no immediate plans to close any locations.
Informational meetings are scheduled for November 12, 19, 20, 24 and December 1 to share greater details with members and to address questions and concerns. Ballots will be mailed in early December. Voting will close December 21 with the tabulation on December 22.
Central Valley Cooperative is a full-service agricultural supply and marketing company serving more than 2,300 voting members. Central Valley has about 180 full-time employees plus about 70 seasonal employees. WFS serves more than 4,000 members and employees 230 full-time employees.