Those endless fields of flowers stretching across South Dade are changing hands.
Costa Farms is being acquired but the third-generation, family-owned ornamental plant nursury business will stay rooted in South Florida.
Markel Corp., a diverse financial holding company, will acquire a majority stake in Costa Farms, the companies announced Wednesday. But Costa Farms, with operations around the world, will continue with the same management in place, CEO Jose Smith said.
The transaction, which will also include Costa’s related operating companies for the nursery business, is expected to close in the third quarter. Modern Health, a separate entity for medicinal marijuana, is not part of the transaction and neither is the real estate, Smith said. Terms of the deal were not released.
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Founded in 1961 by Jose Costa on 30 acres in Redland, Costa Farms today is the largest producer of ornamental plants in the country and probably the planet, Smith said. It spans 4,000 acres globally and employs nearly 5,000 people.
Costa’s nursery operations include indoor and bedding plant divisions, merchandising units and young-plant production divisions, with operations in South Florida, Central Florida, North Carolina, South Carolina, the Dominican Republic and Asia.
“What made this very attractive for us is that Markel is providers of permanent capital. It’s not like a private equity firm that invests for a short period time and then needs to sell the company. These guys have never sold a business,” said Smith, who runs the business with his wife, Maria Costa-Smith, and her brother, Jose Costa III..
In the past, he said, his company has grown both organically and opportunistically. Now, “we are excited about having a lot of capital available to grow our business and we will probably be a little more deliberate about our acquisitions in the future with this great financial partner going forward.”
Smith said Costa generates about $500 million in revenue and sells some 150 million ornamental plants in about 1,500 varieties annually to Lowe’s, Home Depot, Ikea, Wal-Mart and wholesale clubs.
Markel, through its subsidiary Markel Ventures, makes long-term investments in high quality companies, said Tom Gayner, co-CEO of Markel. Markel has purchased 17 companies in the last 20 years; Costa is the largest. Markel’s principal business is specialty insurance products.
“The Costa family and their team have spent generations building a company that beautifies people’s lives and homes with millions of plants and garden flowers each year,” said Gayner, in a statement. “We love what they do and the way they go about doing it, and when they approached us looking for a partner to support the continued growth of this incredible company for future generations, we couldn’t have been more excited.”
Nancy Dahlberg: 305-376-3595, @ndahlberg