(June 13) A group of mushroom industry veterans is battling with some Wall Street financiers to take over the world’s largest producer and distributor of mushroom spawn or seed. The winner would control a company that has nearly $30 million a year in fresh mushroom sales.

The high bidder for Sylvan Inc., Saxonburg, Pa., could become the biggest player in the spawn industry. Spawn is the equivalent of seed for the mushroom fungal and cultural process.

Sylvan owns Quincy Farms, a large Quincy, Fla., fresh mushroom farm. Modern Mushroom Sales Co., Avondale, Pa., is Quincy Farms’ exclusive sales agent. Quincy Farms produces 25 million pounds of fresh mushrooms a year.

Virgil Jurgensmeyer, co-founder and chief executive officer of Miami, Okla.-based mushroom grower-shipper J-M Farms Inc., along with Roger Claypoole, president of WWF Mushrooms, the general partner of Worthington, Pa.-based grower-shipper Creekside Mushrooms Ltd., have joined two of Sylvan’s executives who want to buy the company.

Sylvan’s chief executive officer Dennis Zensen and chief financial officer Donald Smith have proposed to buy Sylvan stock for $11 a share in cash, valuing the company at $56 million.

Neither Jurgensmeyer, a Sylvan board member, nor Claypoole would comment on the matter.

The Wall Street bidders are led by investment fund owners that control 31% of Sylvan’s stock.

John Licata, a senior analyst and market strategist for Brokerage America, New York, who covers Sylvan, said he thinks the mushroom industry is a sector many investors overlook.

“I think the opportunity for upscale growth is there,” he said. “Whoever comes out on top will definitely solidify a dominant position in that sector.”

Licata calls Sylvan an industry leader that specializes in a growth area that has few players. “That’s one of the reasons that attracted me to the company. They’re one of the top players in their niche. The mushroom veteran community is small. Whoever loses in this deal will be left out in the cold.”

Sylvan, which had $88 million in revenues in 2002, earns about a third of its revenues and 21% of its operating income from fresh mushroom sales.

The company began in 1937. In 1988, Zensen and Claypoole were part of a former management group that bought Sylvan. An investment group also was involved in the sale.

A southwest Pennsylvania fresh grower-shipper, Creekside packs under the Moonlight label.