It has been a deal that has been expected for years, yet it seemed like it might never happen. Never in history has the livestock genetics industry seen a rate of change like it has over the past ten years. With many of the small to medium AI companies being sold, it was only a matter of time before we started to see some of the larger programs either be sold or start to merge to stay competitive. With the July 1st merger between Accelerated Genetics and Select Sires Inc., we see the two companies that partnered together internationally in World Wide Sires become an even greater force to be reckoned with in the US and around the world.
As the dairy industry has evolved rapidly in recent years with the commercial adoption of genomics and sorted semen, margins have become smaller, and profitability became more elusive. Janet Keller, President and CEO of Accelerated Genetics gives her viewpoint on the strategy that led to this merger. “Over time, one of the greatest strengths that our cooperative leveraged was that of vision. The leadership at Accelerated Genetics felt it was time to move swiftly to look at opportunities to partner with another genetic organization that had a similar vision, culture, and organizational structure.” From the staff side of the merger, Janet Keller expands on the decision. “One of our cooperative delegates expressed it well, ‘Now is the right time for our cooperative to make plans for the future and join forces’.” Keller had been hired by Accelerated Genetics at the beginning of this year as their President and CEO after the company had posted a $2.6 million net loss last year.
“The dairy industry, through ambitious research and development, has leaped into a rapidly growing environment that has extended beyond our ability to maintain, much less thrive” stated Vice President Marketing Communications at Accelerated Genetics, Angie Lindloff. With that “Accelerated Genetics has been searching for a partner who could enhance the business and move it forward,” comments Scott Dahlk, Accelerated Genetics Board Chair. “So, it only made sense that the company that it already was working within Europe, Africa, Asia, the Middle East and Oceania would become its dance partner in the US and the rest of the world.”
The discussion between the two co-operatives started with an invitation to talk from Board Chairman Scott Dahlk at Accelerated Genetics to Select Sires’ board chairman Dan Andreas in December of 2016. Given the nature of the agreement between the two companies in World Wide Sires and its co-operative structure, Accelerated had a limited number of potential partners, and ultimately that is why Select Sires become the obvious partner going forward.
From there the discussions continued between the two organizations’ representatives about how they could work together and structure the deal. Then, on June 13th, as speculation in the industry started to build, the two organizations announced the potential deal that would see Select Sires acquire the assets of Accelerated Genetics, and join the forces of employees and independent sales representatives in each of their geographical member organizations. (Read more: SELECT SIRES INC., AND ACCELERATED GENETICS TO JOIN FORCES). At a special delegate meeting held June 22, 2017, Accelerated Genetics voting delegates voted in favor of uniting Select Sires Inc. and Accelerated Genetics, formally finalizing the agreement recommended by both cooperative’s boards of directors. (Read more: ACCELERATED GENETICS DELEGATES VOTE TO JOIN FORCES WITH SELECT SIRES, INC.)
As a result of the merger, producers will see that “the creation of a larger sire program, coupled with high fertility, will provide all member/owners with more choices at a competitive price. The ability to spread costs over a larger market will enable Select Sires to continue to be the AI leader in bovine genetics, services and research and development. It is a win-win situation for dairy and beef producers across the U.S.” comments Dan Andreas, Chairman of the Board of Directors, Select Sires, Inc.
Similar to when Select Sires acquired GenerVations back in 2014, it is expected that most client-facing representatives will be retained, though in a slightly different structure. (Read more: SELECT SIRES ANNOUNCES THE ACQUISITION OF GENERVATIONS INC. AND SIRE LODGE INC.) Unlike the GenerVations acquisition, where there was a limited amount of overlap with representatives in each region and the two organizations merged into one sales force, it is anticipated that in this merger there will be two separate lineups for representatives of each organization. Given Select Sires dominant sire lineup and genetic programs, this will be a big win for those Accelerated Genetics representatives that have seen their share of top sires go from 6% back in 2015 to under 3% in 2016. With the two merged programs now representing 36% of the top sires, the merger holds 18% more top sires than the nearest competitor. (Read more: STUD WARS EPISODE IV: THE FORCE GROWS STRONGER – 2016, and STUD WARS EPISODE III – THE CONFLICT FOR CONTROL)
Dave Thorbahn, Select Sires’ President, and CEO comments, “It is pretty early to speculate on all staff positions, but our goal is to attract passionate people at all levels of the organization. At Select Sires and Accelerated Genetics, we value people, as they are a leading reason for our success. We also plan to expand the use of the Accelerated Genetics production facilities in Westby, Wisconsin and will retain employees to accommodate that growth. This also provides opportunities to office employees as well, to support the production, product management, and operational efforts.”
With the merger also comes speculation about what this means for World Wide Sires. Thorbahn comments, “World Wide Sires is one of the most respected sales organizations in the world. It has been very successful in growing sales and has represented both Select Sires and Accelerated Genetics around the globe for years. While World Wide Sires will now be wholly-owned, it does not mean major changes. With one organization now owning all the shares, it will give us an opportunity to work more closely with World Wide Sires and make us more synchronized to better serve the producers around the world.”
For those of you wondering what will happen to the Accelerated Genetics website, which has become one of the most popular resources for searching for sire genetic evaluations, Janet Keller shares with us that “Accelerated Genetics has worked diligently over recent years to provide a resourceful and relevant website for breeders and industry associates around the world. Plans are underway to continue to provide the best information in a timely fashion to people that visit the website moving forward. Dairy and beef sire information, animal health product solutions and cooperative news are just a few of the great resources found on the website. Stay tuned for even greater content.”
The Bullvine Bottom Line
One could very accurately argue that the dairy cattle genetics industry has changed more in ten years than it has ever done before in its history. With that comes the need for organizations to either change or close their doors. When Select Sires was formed back in 1965, it was Accelerated Genetics (then known as Tri-State Breeders) deciding not to join the newly formed co-operative and instead to take their own path. Now, 52 years later, we see these two co-operatives finally merging and further cementing the position of the Select Sires Federation as the greatest force in the dairy breeding industry in the world.