Heartwood Partners bets on land reclamation through NativeSeed

NativeSeed operates mainly in the Rocky Mountain states and the Pacific Coast, areas battered by extreme weather.

Many private equity firms have increased their focus on ESG. To that end, earlier this week Heartwood Partners, a Norwalk, Connecticut-based firm, acquired NativeSeed Group, a company that focuses on habitat restoration, land reclamation and erosion mitigation through native seeds.

Heartwood bought the  company from Victor Schaff, a pioneer of the native seed industry. The company provides seed and erosion control services to a wide range of markets, including federal and state government agencies, small and large farms, private companies, homeowners and more.

PE Hub caught up with James Sidwa, a partner at Heartwood, to learn more.

Headquartered in Carpinteria, California, NativeSeed operates mainly in the Rocky Mountain states and the Pacific Coast, areas battered by extreme weather.

James Sidwa, Heartwood Partners

The company runs “four state-of-the-art farming, processing and cleaning operations capable of producing a wide range of seed species from large-scale, workhouse varieties to highly specialized local ecotypes,” according to its website.

It also provides consulting services to its clients about the optimal plant seeds for land reclamation and habitat restoration. The company provides advice on climate, social and environmental concerns, Sidwa said.

There are different opportunities that come, depending on the nature of the clients. For instance, oil drilling and mining activities disturb the natural habitat in the area that companies will be working in. After those activities, companies will need to restore the land and will require native seeds to do that, Sidwa noted.

In other instances, infrastructure projects, such as construction of power lines, can cause harm to the natural habitat. At the conclusion of those projects, NativeSeed can help companies respond in different ways to rehabilitate the land.

When it comes to collecting the seeds, “in some cases, we actually go out there and collect the seed from the ground before they do these projects,” Sidwa said. When the projects are completed, the seeds will be available for planting in the exact location and region that was previously disturbed.

Other opportunities lie in agriculture-focused strategies, such as keeping soil nutrient-rich, or reinvigorating it to mitigate against erosion or landslides when faced with extreme weather.

The company also sells seeds to homeowners, a growing market. For example, homeowners might be looking for plants that offer a buffer area between public areas and their homes in the event of a wildfire, or they could just be looking for a variety of grass types for a more natural setting, Sidwa explained.

Even though the investment comes at a time of economic stress, Sidwa said legislation, such as the bipartisan Infrastructure Act, provides a lot of money that is meant for land restoration, including on abandoned mines, where NativeSeed can pick up opportunities.

Growth for NativeSeed can come in the form of “geographic expansion, both through organic measures, as well as potentially through acquisition.” Sidwa said there is an opportunity to fill in gaps within the existing geography and open new markets beyond what is served today, including in Canada and Mexico.

The market is ripe for acquisitions, as some competitors from founder-led companies are looking to retire. In some instances, growth can come from family-owned businesses who may want to give up commercial activities on their land and find a partner who will run their farms, even though they will continue to own the land.

Sidwa added: “We are specialists in helping family businesses transition to the next stage.”

Heartwood has other companies in its portfolio that focus on the environment. They include SM Stoller Corporation, a Bloomfield, Colorado-based provider of environmental and outsourced management and operations services, primarily to department of Energy facilities.

There is also Super-Sod, a Lakeland, Georgia-based provider of sod, seed, soil, and other landscaping products throughout the southeastern US, as well as CMI, a Marietta, Georgia-based manufacturer of equipment used primarily for access to marine locations.