June 20, 2016

Land O’Lakes announced it has agreed to acquire agricultural biotech company, Ceres Inc., in a deal valued at $17.2 million.

Under the terms of the deal Land O’Lakes will acquire all of Ceres’ outstanding capital stock and will make a tender offer for all outstanding shares of Ceres common stock for $0.40 per share, representing an 81% premium over the stock’s closing price on June 16, 2016. Ceres will then become a wholly owned subsidiary of Land O’Lakes and will be complementary to Land O’Lakes’ existing subsidiary, Forage Genetics International.

“The acquisition brings complementary strengths together, adds new advanced plant breeding and biotechnology to the FGI research and development pipeline and accelerates the process of bringing new forage solutions to existing and new markets,” said Chris Policinski, president and CEO, Land O’Lakes in a company statement.

Founded in 1996 in Thousand Oaks, California, Ceres began as a developer of seeds and traits to create advanced crops including sorghum and switchgrass for biofuel production with a particular focus on the Brazilian market. However, economic conditions in the Brazilian market putting pressure on the ethanol industry combined with shifts in global markets, drove the company to decide to change its focus according to Biofuels Digest.

Last year the company reorganized its business and began to concentrate on the production and commercialization of forage crops that offer improved yields, nutrition, and energy while also aiming to expand its geographical reach reports Seed World.

“Our shift away from bioenergy and Brazil and into forages has been highly successful to date, and is culminating now in this proposed merger transaction with a preeminent leader in forage crops,” said Richard Hamilton, chief executive officer and president, Ceres.

For the most recent fiscal year ending August 31, 2015, the Star Tribune reports that Ceres posted a loss of $28.2 million on revenue of $2.7 million compared with a loss of $29.3 million on revenue of $2.4 million the year before.

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Lynda Kiernan