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Land O’ Lakes Inc., one of America’s premier agribusiness and food companies, agreed to acquire Californian agricultural biotech and plant genomics pioneer Ceres Inc. (NASDAQ: CERE) for $17.2 million in cash. The offer price of $0.40 per share, represents an 81% premium to yesterday’s $0.22 closing price of Ceres shares. In December 2015, Ceres raised $7.6 million through a public offering priced at $0.40 per share, with net proceeds of $6.4 million. In February 2012, Ceres completed its initial public offering priced at $13.00 per share, and raised $65 million. Prior to its IPO, Ceres had raised $95 million in two private equity rounds. At the time of its IPO, the largest shareholders were global private equity firms Warburg Pincus, Artal Luxembourg, Ambergate Trust and Oxford Bioscience, while biotechnology company Monsanto (NYSE: MON), which Germany’s Bayer AG (ETR: BAYN) agreed to acquire a few weeks ago for $62 billion, had a 4.8% stake in Ceres. At closing Ceres will become a wholly owned subsidiary of Land O’Lakes and will complement Forage Genetics International (FGI), a Land O’Lakes subsidiary, bringing advanced new plant breeding and biotechnology to FGI’s research and development pipeline.

Land O’Lakes is a member-owned cooperative with industry-leading operations that span the spectrum from agricultural production to consumer foods, with 2015 annual sales of $13 billion. In comparison, Monsanto generated $15 billion in revenue in 2015. As a result, “the deal with Ceres could potentially catapult overnight the legendary Land O’Lakes coop and its Forage Genetics International business into a publicly traded agricultural biotech giant, virtually on the scale of Monsanto,” says ExitHub’s CEO Norbert Mehl.
“Through our Forage Genetics International business, Land O’Lakes is interested in providing a holistic forage offering to our customers, including alfalfa, corn silage and forage sorghum. 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 Land O’Lakes president and CEO Chris Policinski. “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 Ceres CEO and president Richard Hamilton. “After evaluating strategic options, our board of directors has unanimously determined that this all-cash transaction, which represents a significant premium from recent trading levels, is in the best interest of the company and its stockholders, and will advance Ceres’ mission of making the production of meat and dairy more scalable and sustainable.” Upon the closing of the transaction, holders of certain warrants to purchase shares of Ceres common stock will be entitled to payments of approximately $6.1 million, in the aggregate. The transaction, which has been approved by the Land O’Lakes board of directors and unanimously approved by the Ceres board of directors, is expected to close in the third calendar quarter of 2016. Land O’Lakes will fund the transaction with cash on hand. The transaction is not subject to any financing contingency. Closing of the tender offer and merger is subject to customary conditions. Ceres is an agricultural biotechnology company that develops and markets seeds and traits to produce crops for animal feed, sugar and other markets. The company’s advanced plant breeding and biotechnology platforms, which can increase crop productivity, improve quality, reduce crop inputs and improve cultivation on marginal land, have broad application across multiple crops, including food, feed, fiber and fuel crops. Ceres markets its seed products under its Blade brand. The company also licenses its biotech traits and technology to other life science companies and organizations. Ceres was founded in 1996, it has 44 employees, and is headquartered in Thousand Oaks, California. Land O’Lakes is one of the nation’s largest cooperatives. Building on a legacy of more than 94 years of operation, Land O’Lakes today operates some of the most respected brands in agribusiness and food production including LAND O LAKES Dairy Foods, Purina Animal Nutrition and WinField. The company does business in all 50 states and more than 60 countries. Land O’Lakes’ headquarters are in Arden Hills, Minnesota.]]>