Are You Prepared to Sell or Merge?
Have you ever thought about selling your seed company or becoming part of a merger? One critical factor that affects your company’s value is your data management. Poorly managed or inaccessible data can significantly devalue your business.
When assessing company worth, many factors are considered: future growth potential, business risks, and cost of capital. But in the world of seed companies, your germplasm is often your most valuable asset. What is the potential of your genetic material? Is it worth $5 million, $10 million, or even $1 billion?
Can You Prove the Value of Your Germplasm?
If a potential buyer asks, “What’s the value of your germplasm?” — can you confidently answer? More importantly, can you back up your response with data?
An experienced plant breeder can examine your program’s data and quickly judge how well it has been managed. If your data is organized, accessible, and relational, you’re in a strong position. If not, you may face a devaluation.
A Tale of Two Breeders
Imagine a buyer asks to see the data for your Top 10 breeding lines.
- Company A’s breeder fumbles through multiple Excel sheets, copying and pasting to consolidate information.
- Company B’s breeder executes a quick search and pulls up all the associated data instantly.
Which breeding program would you want to inherit?
It’s the difference between saying, “Trust me, it’s all there,” and confidently stating, “Here it is — would you like anything else?”
Data Disorganization Comes at a Price
In a real example, a cucumber breeder in the U.S. started at a new company and discovered that all legacy data was stored in binders and obscure paper records — not even Excel spreadsheets! While the information may have been valuable, it was unusable.
This kind of poor data management doesn’t just frustrate new hires — it increases onboarding time, reduces productivity, and lowers the overall company valuation.
Make Your Data Work for You
As a breeder, you should be able to instantly generate reports on:
- All parental lines
- All populations
- Trait performance history
- Line pedigrees
- IP ownership or patent clarity
You may even need to prove there’s no patent infringement. A robust, searchable database with standardized nomenclature allows you to retrieve every piece of data linked to a variety name or number — instantly.
If you can’t do this, potential buyers will factor in the risk and cost of data cleanup, and that affects what they’re willing to pay.
Good Data Management Increases Business Value
If your database is strong, relational, and well-maintained, the value of your germplasm rises dramatically. That, in turn, boosts the overall valuation of your business.
Investing in plant breeding software may seem like a cost, but it often pays back 10:1 — or even 100:1 — over time. Proper data management also has a compounding effect, building more value each year.
Final Thoughts: Make It Easy for Buyers to Say Yes
If you’ve got good material — and you have the data to back it up — buyers will notice. And they’ll be more willing to invest in your seed company.
Have you ever thought of selling your company, or might you be part of a merger? One consideration that comes into play is your data, and its mismanagement, or relative inaccessibility, could actually devalue your company. There are many aspects that go into the valuation of a company, some of which include future prospects of the business, the risks of the business and the cost of capital. But for any seed company, it’s the germplasm that’s worth the most. What’s the potential of that genetic material? Is it $5 million? $10 million? Maybe $1 billion?
If a potential buyer asks the value of your germplasm, are you prepared to give a response, and do you have the data to back it up? Any experienced breeder can look at the data and get a sense of how the program has been managed.
As an example, a potential buyer asks to see the data associated with the Top 10 lines. The breeder with Company A has to sort through piles of Excel sheets and then transfer the data to another sheet so it’s all in one place. The breeder with Company B hits a few keystrokes and automatically pulls up the Top 10 lines and all associated data. Now if you’re the buyer, which breeding program do you want to inherit? It’s a “Trust me, it’s all there” situation versus being able to say “Here it all is. Do you need anything else?”
If the data isn’t very useable, it’s going to cost the buyer. For instance, we met a cucumber breeder in the U.S. who had just started with a company. When he arrived, he found all the data in old binders and cryptic sheets — not even in Excel! The data was not in a form that allowed him to use it. This was just this year, not back in the 1970s. The information there might be valuable, but it’s hard to decipher and use.
As a breeder, you should be able to easily pull requested data (all parents or all populations) and show it to a potential buyer. You might also have to prove there is no patent infringement. The best way to prove this is to have a highly relational database where nomenclature is standardized and one can search by variety name or number and everything associated is called up. As a new owner, if this step is ignored, the penalties could end up costing you more than what you paid for the company — not a comforting thought.
If you have a strong, well-organized database, this increases the value of your germplasm and genetic material. When you consider all this, the cost of plant breeding software is minimal; it has the potential to pay back 10:1 or maybe even 100:1. Properly managing your data in a highly relational database has a compounding effect over time.
If you have good material and you have the data to back it up, companies will line up to buy it.
(First published on SeedWorld.com, January 2018)
Find out more at: agronomix.com
Dr Dieter Mulitze is Founder and CEO of Agronomix Software Inc. – developers of leading plant breeding software for breeders and variety testers.
