Investor Group Acquires Majority Stake In Star Seed

June 2013       Download PDF      Print

Client Objective

After long and successful careers growing Osborne, Kansas-based Star Seed into a nationally recognized seed producer and distributor, owners Tom Lutgen, Dennis Lutgen, and Bob Hamel wanted to recapitalize their company and take some ‘chips off the table’. At the same time, the owners wanted to maintain an equity position in the company and continue to watch it grow as a dominant player in the seed industry.

Solution

Star Seed, Inc. retained Allied Business Group as its exclusive financial advisor in connection with the possible sale or recapitalization of the company. Allied compiled a comprehensive list of more than 600 prospective domestic and international strategic buyers, as well as over 8,000 initial contacts at private equity firms across the U.S.

Allied then developed a one-page blind prospectus and a detailed confidential information memorandum for interested buyers. Working with a professional videographer, they also filmed a two-hour marketing video which allowed prospective buyers from across the world to take a virtual tour of Star Seed’s operations. After preparing these materials, Allied reached out to its list of strategic and private equity buyers through a confidential marketing campaign and, as a direct result of these efforts, nearly 150 qualified prospective buyers responded.

Result

In June 2013, the owners sold a majority interest in Star Seed to a group of three private equity firms: The Gladstone Companies, Broadgate Capital, and Highline Equity Partners. The owners maintained a minority equity stake in Star Seed and were named to executive positions within the company. In their new roles, the owners will help Star Seed’s investors lead the company in future growth initiatives.

About Star Seed

Founded in 1920, Star Seed is a recognized leader in the national seed market. They are a seed producer, conditioner, and distributor and offer over 500 products including several brand name seed varieties.

About The Gladstone Companies

Gladstone is a family of public and private investment funds with $1.2 billion invested in over 250 companies across a broad range of industries. Located in Washington, D.C., they provide financing solutions for private equity sponsors.

About Broadgate Capital

Broadgate is a Dallas, Texas-based private equity firm targeting smaller middle market companies in niche industries with strong growth potential.

About Highline Equity Partners

Based in Denver, Colorado, Highline invests in companies with strong management teams across the U.S. Like Broadgate, they invest in middle-market companies in niche industries.