Crop Health Co. Agrees to $236M Merger With Seed Care Firm

March 22, 2022

Source: Streetwise Reports   03/17/2022

Shares of Marrone Bio Innovations Inc. traded 47% higher after the company agreed to merge with Bioceres Crop Solutions Corp. in an all-stock transaction valued at $236 million.

Plants

Agricultural company Marrone Bio Innovations Inc. (MBII:NASDAQ), which endeavors to create biological products from microorganisms that are employed to support sustainable, eco-friendly farming practices associated with crop protection, crop health and crop nutrition and Bioceres Crop Solutions Corp. (BIOX:NASDAQ), yesterday announced that “they have entered into a definitive agreement to combine the companies in an all-stock transaction.”

The agreement stipulates that MBI shareholders will receive 0.088 Bioceres shares for each MBII common share owned. The companies advised that the transaction represents a total value of around $236 million, based upon the firms’ closing share prices on March 15, 2022.

The report stated that combining the two companies will create a global leader in sustainable agricultural solutions, as it will bring together Bioceres’ expertise in bionutrition and seed care products with MBI’s capabilities in developing biological crop protection and plant health solutions.

The two companies in aggregate, presently employ around 640 people in 46 countries. MBI and Bioceres currently own and operate manufacturing facilities and R&D facilities in Davis, Calif. (MBI) and Rosario, Argentina (Bioceres).


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Bioceres Crop Solutions’ CEO Federico Trucco commented, “We are very excited about the value creation that will result from this combination for customers, employees and investors…By combining our current commercialized products and pipelines, we will be in a position to serve all major agriculture input categories with low environmental impact, highly efficacious, biological based solutions.”

“MBI’s commercial footprint in North America and Europe will strongly complement our existing efforts in these geographies, while Bioceres’ leadership in Latin America will provide an excellent channel for MBI’s portfolio in these important row-crop markets. Together, we will create a winning platform in one of the most dynamic segments of agriculture,” CEO Trucco added.

Marrone Bio Innovations’ CEO Kevin Helash remarked, “Our merger has the potential to accelerate global reach, broaden our product offerings and expand our R&D programs…Consumer and grower demand is accelerating for agricultural products that help produce safe, affordable food in a sustainable manner. We will be able to further serve that market opportunity and provide our distribution partners and our growers with greater returns on investment.”

Helash pointed out that the merger is expected to provide $8 million in annual cost savings synergies and added that the two firms share a culture of innovation and entrepreneurial spirit.

Bioceres’ CFO Enrique Lopez Lecube stated, “Bioceres has a proven track record in successfully integrating and scaling up businesses that have cultures focused on the commercialization of innovation. Since we integrated Rizobacter just over five years ago, revenue almost tripled and margins have expanded, driving ~4x increase in EBITDA. Rizobacter had the team, the products, the industrial capabilities and strong customer relationships needed to materialize growth, and we partnered with their leadership to unlock the opportunity.”

“In connection with the merger, we have agreed to terms for up to $45 million in long-term committed capital in the form of a convertible loan. In addition to each company’s existing cash position, we estimate that pro forma cash will be around $100 million,” Lopez Lecube added.

The combined company is expected to benefit form a broad client, product and geographic base across a wide and diverse range of crops. The newly combined firm will be well-positioned to meet fast growing market demand for bio-reduction and replacement of harmful chemical-based agricultural inputs.

The companies indicated that the merger transaction has already been unanimously approved by each company’s respective Board of Directors and is expected to close in Q3/22, subject to approval by Marrone Bio’s shareholders, ordinary closing conditions and regulatory approval. When the merger is completed, existing MBI shareholders will own about 16 million shares of Bioceres. In addition, a minimum of two individuals will be selected by MBI to serve on Bioceres’ Board of Directors.

Bioceres Crop Solutions Corp. is headquartered in Rosario, Argentina. The company is full-service provider of crop productivity technologies engineered to speed the transition towards carbon neutrality in agriculture. The firm employs digital technology that offers end-to-end traceability to optimize patented seed technologies, microbial ag-inputs, and crop nutrition and protection. The company claimed that “its solutions create economic incentives for farmers and other stakeholders to adopt environmentally friendlier production practices.”

Marrone Bio. is an agricultural company focused on discovering, developing and selling sustainable biological products for applications in crop protection, nutrition and health. The company listed that it has a portfolio of 18 multi-patented commercial products which are sold globally for use in farming row crops such as fruits and vegetables, fruit trees, nuts and vines and in various greenhouse operations. The company’s specialized R&D program utilizes MBI’s proprietary technologies to create new, environmentally sound solutions in agriculture using naturally occurring microorganisms and plant extracts. The company has developed its biopesticides to enhance crop quality and yields and reduce environmental impact.

Marrone Bio started off the day with a market cap of around $124.3 million with approximately 177.2 million shares outstanding and a short interest of about 1.3%. MBII shares opened 28% higher today at $0.9001 (+$0.1987, +28.33 %) over yesterday’s $0.7014 closing price. The stock has traded today between $0.9001 and $1.10 per share and is currently trading at $1.03 (+$0.3286, +46.85%).

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