Bioceres Crop Solutions Corp. and Marrone Bio Innovations, Inc. (MBI) announced today that they have entered into a definitive agreement to combine the companies in an all-stock transaction. Under the terms of the transaction, which has been unanimously approved by the board of directors of both companies, each share of MBI common stock will be exchanged at closing for ordinary shares of Bioceres at a fixed ratio of 0.088, representing a value of approximately $236 million, based on the Bioceres and MBI share prices at market close on March 15, 2022, and the number of current outstanding MBI shares.
This transaction will combine Bioceres’s expertise in bionutrition and seed care products with MBI’s leadership in the development of biological crop protection and plant health solutions, creating a global leader in the development and commercialization of sustainable agricultural solutions. The companies together operate in 46 countries with approximately 640 employees, including two wholly owned manufacturing facilities and research and development facilities located in Davis, California, and Rosario, Argentina.
“We are very excited about the value creation that will result from this combination for customers, employees and investors,” says Bioceres CEO Federico Trucco. “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’s leadership in Latin America will provide an excellent channel for MBI’s portfolio in these important row-crop markets,” Trucco continues. “Together, we will create a winning platform in one of the most dynamic segments of agriculture.”
“Our merger has the potential to accelerate global reach, broaden our product offerings, and expand our R&D programs,” says Kevin Helash, CEO of Marrone Bio. “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 notes that the merger is anticipated to generate $8 million in annual cost synergies, the majority of which relate to the elimination of duplicative public company expenses and consulting fees.
“MBI and Bioceres have a shared culture of innovation and entrepreneurial spirit. With complementary R&D capabilities, the combination unlocks many additional possibilities for further groundbreaking commercial solutions,” says Helash.
“Bioceres has a proven track record in successfully integrating and scaling up businesses that have cultures focused on the commercialization of innovation,” says Bioceres CEO Enrique Lopez Lecube. “Since we integrated Rizobacter just over five years ago, revenue almost tripled and margins have expanded, driving about a 400% 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.
“Concurrent with Rizobacter’s acquisition, Bioceres negotiated a $45 million long-term loan, today fully repaid, that brought in the financial resources to execute on our ambitious plans. Similarly, today we are announcing that 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. Finally, we are also announcing the conversion to equity of 75% of the 2023 convertible loan, with the other 25% restructured into a new four-year loan.”
“We are excited that the scale created by this combination with Bioceres can accelerate and expand the commercialization of Marrone’s existing products. The combined companies will have the quality, experience and depth of management as well as the financial resources to realize the full potential of Marrone’s pipeline,” says Dwight Anderson, managing partner at Ospraie Ag Science LLC, the largest shareholder of MBI.
The combined company will have a diverse customer base, product portfolio and geographic reach across a wide range of crops, positioned to serve the massive market opportunity emerging from the bio-reduction and replacement of chemical ag inputs. Key products in the combined companies’ R&D pipelines include Bioceres’s HB4 drought tolerance program in wheat and soybeans and MBI’s breakthrough research in bioherbicides. Additionally, MBI recently submitted regulatory packages for its novel bioinsecticide/bionematicide products MBI-306 and MBI-206 to the U.S. Environmental Protection Agency and Brazilian authorities for approval, respectively.