Bioceres, Marrone Bio Announce Merger Forming Global Leader in Sustainable Ag Solutions

By Lynda Kiernan-Stone, Global AgInvesting Media

Bioceres Crop Solutions and Marrone Bio Innovations (MBI) announced their definitive agreement to merge their companies through an all-stock transaction valued at approximately $236 million.

In connection with the deal, Bioceres has agreed to terms for a capital commitment between $37.5 million - $45 million in the form of a convertible loan, which will mature in four years post-closing.

The merging of these two entities will bring together Bioceres’ expertise in bio-nutrition and seed care products with Marrone Bio’s skills and experience in the development of biological crop protection and plant health solutions, resulting in a combined company with a diverse product portfolio aimed at the bio-reduction and replacement of chemical ag inputs, a varied customer base, and geographic footprint across a wide range of crops.

Headquartered in Rosario, Argentina, Bioceres is a provider of crop protection technologies with the potential to foster a shift in agricultural production toward carbon neutrality. The company’s unique biotech platform of high-impact, patented seed technologies and microbial ag inputs create incentives for farmers, and other stakeholders to adopt environmentally friendly production methods.

Likewise, from its headquarters in Raleigh, North Carolina, Marrone Bio’s R&D program uses proprietary technologies to isolate and screen naturally occurring microorganisms and plant extracts to create innovative biological products for crop protection, crop health, and crop nutrition. Its 18 products are supported by more than 500 issued and pending patents, and are sold globally to end users in row crops, fruits and vegetables, trees, nuts, vines, and greenhouses.

“We are excited that the scale created by this combination with Bioceres can accelerate and expand the commercialization of Marrone’s existing products,” said Dwight Anderson, managing partner, Ospraie Ag Science LLC, the largest shareholder of MBI. "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.”

Key products that will be included in the merged company’s pipeline are Bioceres’ HB4 drought tolerance program in wheat and soybean, and MBI’s cutting-edge research in bioherbicides. MBI also has recently submitted regulatory packages to the U.S. Environmental Protection Agency and authorities in Brazil for its novel bioinsecticide/bionematicide product MBI-306 and MBI-206.

“We are very excited about the value creation that will result from this combination for customers, employees and investors,” said Federico Trucco, CEO of Bioceres.“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.”

Trucco continued, “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.”

Together, the companies operate in 46 countries and have a total of 640 employees, two wholly owned manufacturing facilities, and R&D facilities located in Davis, California, and Rosario, Argentina. And the merger of the two is expected to generate $8 million in cost synergies per year, mostly through the elimination of duplicative public company expenses and consulting fees, according to Kevin Kelash, CEO, Marrone Bio.

“Our merger has the potential to accelerate global reach, broaden our product offerings and expand our R&D programs,” said Helash. “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 went on to say, “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.”

Enrique Lopez Lecube, CFO of Bioceres noted how the financing structure for this deal is rather similar to that employed when Bioceres integrated Rizobacter just over five years ago.

“Bioceres has a proven track record in successfully integrating and scaling up businesses that have cultures focused on the commercialization of innovation,” said Lopez Lecube.

“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.”

He continued, “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 percent of the 2023 convertible loan, with the other 25 percent restructured into a new four-year loan.”

This merger is subject to the approval of MBI shareholders, regulatory clearance, and other usual closing conditions. So far, shareholders representing 49 percent of the company's outstanding shares of common stock have entered into agreements signaling their approval of the merger. Upon its expected close in the third quarter of calendar 2022, MBI shareholders will own approximately 16 million shares of Bioceres, with at least two people chosen by MBI to be appointed to the Bioceres board of directors.

- Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News, as well as HighQuest Group's Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.