Arcadia Biosciences Announces Plans to Acquire Oregon-Based Industrial Seed Innovations
-- Transaction will accelerate Arcadia's GoodHempTM breeding platform, expand seed portfolio and customer base, and establish new breeding station --
DAVIS, Calif., June 10, 2020 /PRNewswire/ -- Arcadia Biosciences, Inc.® (Nasdaq: RKDA), a leader in science-based approaches to enhancing the quality and nutritional value of crops and food ingredients, today announced it has entered into a binding term sheet with Industrial Seed Innovations (ISI), an Oregon-based industrial hemp breeding and seed company, to acquire its commercial and genetic assets, including its seed varieties, germplasm library and intellectual property.
"Industrial Seed Innovations brings tremendous talent, an impressive intellectual property and genetics portfolio and a solid and synergistic customer base to Arcadia," said Matthew Plavan, Arcadia's president and CEO. "This transaction will strengthen our hemp breeding and seed production capabilities, augment and leverage our proprietary ArcaTechTM discovery platform and further position us as a leader in delivering high-value, premium hemp seeds."
According to the term sheet, ISI's popular Rogue, Deschutes and Umpqua seed varieties will become part of Arcadia's portfolio, alongside the company's GoodHempTM line of genetically superior hemp seeds, transplants, flowers and extracts. The acquisition will significantly broaden and accelerate commercialization of Arcadia's hemp-related breeding platform, as well as establish a breeding research and development facility in the Pacific Northwest, a key hemp production area. With ISI's historically healthy gross margins, the acquisition is expected to be neutral to accretive to cash flow from operations in 2020 and meaningfully accretive to cash flows in 2021.
Plavan continued, "With the additional capital secured last month to underwrite our strategy to accelerate growth through the acquisition of assets, this transaction will add value and speed to our hemp and hemp products business, underscoring our ambitious plans for market leadership."
The transaction is expected to close in the third quarter of 2020. Financial details of the term sheet were not disclosed. The transaction remains subject to a number of conditions, including completion of due diligence, the receipt of any required consents and the negotiation of definitive documentation, which is expected to include warranties, representations, covenants, terms and conditions which are customary for a transaction of this nature.
"We're excited to become part of Arcadia and the GoodHemp portfolio," said Michael Hartenstein, president of ISI. "By joining with Arcadia, we are confident we'll be able to deliver our strong performing, federally compliant hemp varieties to even more growers, extending into new geographies. Furthermore, Arcadia's ArcaTech platform will amplify the genetic assets we've developed at ISI."
Since launching its hemp operations in February 2019, Arcadia has been rapid-prototyping novel non-GM hemp varieties that target quality and performance characteristics highly desired by growers to overcome their greatest challenges – working directly with them in field deployment and monitoring to accelerate their speed to success. This new and proprietary discovery process, ArcaTech, combines Arcadia's modern breeding science and genomics technology with real-time market intelligence from the field.
About Arcadia Biosciences, Inc.
Arcadia Biosciences (Nasdaq: RKDA) is a leader in science-based approaches to enhancing the quality and nutritional value of crops and food ingredients. The company's new GoodHempTM seed catalog delivers genetically superior hemp seeds, clones, transplants, flowers and extracts, applying the company's proprietary crop innovation technology, ArcaTech™, to an emerging crop. The company's GoodWheat™ branded ingredients deliver health benefits to consumers and enable consumer packaged goods companies to differentiate their brands in the marketplace. Arcadia's agricultural traits are being developed to enable farmers around the world to be more productive and minimize the impact of agriculture on the environment. For more information, visit www.arcadiabio.com.
About Industrial Seed Innovations
Industrial Seed Innovations is an Oregon-based, R&D breeding company operating under Section 7606 of the 2014 Farm Bill and the recent passing of the 2018 Farm Bill. The company operates within the Oregon Industrial Hemp Agricultural Pilot Program and offers feminized, CBD-rich, industrial hemp cultivars to licensed hemp growers across Oregon. The company uses traditional breeding methods to develop cultivars acclimated to the state's diverse climates. For more information, visit www.industrialseed.com.
Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the expected closing of the acquisition of assets from Industrial Seed Innovations and the impact of that acquisition on Arcadia's business and financial results. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, and reported results should not be considered as an indication of future performance. These risks and uncertainties include, but are not limited to: the company's and its partners' ability to develop commercial products incorporating its traits and to complete the regulatory review process for such products; the adequacy of hemp seed demand and pricing to support our projections; the satisfaction of conditions to consummate the acquisition; the company's compliance with laws and regulations that impact the company's business, and changes to such laws and regulations; the potential impact of COVID-19 on our business; and the company's future capital requirements and ability to satisfy its capital needs. Further information regarding these and other factors that could affect the company's financial results is included in filings the company makes with the Securities and Exchange Commission from time to time, including the section entitled "Risk Factors" and additional information set forth in its Form 10-K for the year ended December 31, 2019 and other filings. These forward-looking statements speak only as of the date hereof, and Arcadia Biosciences, Inc. undertakes no duty to update these forward-looking statements.
SOURCE Arcadia Biosciences, Inc.
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