Marrone Bio Announces Acquisition of Pro Farm Technologies in the $4.6 Billion Seed-and-Soil Treatment Market

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DAVIS, Calif. — August 8, 2019 — PRESS RELEASE — Marrone Bio Innovations Inc., a sustainable bioprotection and plant health solutions company, has announced that it has entered into a definitive purchase agreement to acquire Pro Farm Technologies OY, which will increase Marrone Bio’s market share and global platform in the $4.6 billion seed- and soil-treatment market.

With the acquisition of Pro Farm, Marrone Bio will add proprietary nutrient and biostimulant technology and products for seed and foliar treatments to its portfolio. This transaction also will give the company a significant opportunity to leverage an expanded global distribution network for all of MBI’s products.  Marrone Bio expects to benefit from partial-year sales in 2019 as a result of the transaction. With historical gross margins significantly higher than Marrone Bio’s current product portfolio average, the Pro Farm acquisition is expected to be accretive to net income and cash flow from operations in 2020.

“This acquisition is an example of the kind of transformative investments that we seek to grow Marrone Bio from a product, crop and geographic perspective, and to do so in a way that can immediately accelerate our revenue growth and margin expansion,” said Marrone Bio Chairman of the Board Bob Woods.  “We believe acquisitions like Pro Farm will allow us to cost-effectively expand our global scale, and significantly escalate our growth trajectory.”

Marrone Bio Chief Executive Officer Dr. Pam Marrone added, “Today’s announcement is a critical step in our strategic objective to build a platform company that leverages our scientific, manufacturing and commercial expertise through new agricultural solutions.  We believe we have the technology, talent and financial support to achieve our goal of creating a biological ag inputs company of major scope and scale.”

The transaction is expected to close in the third quarter of 2019, subject to satisfaction of customary conditions. Pro Farm is being acquired for an agreed enterprise value of $31.8 million, including a combination of $6.2 million cash and 12.7 million shares of Marrone Bio stock to be paid to Pro Farm’s equity holders, debt holders and advisors upon the closing of the transaction, as well as the opportunity for potential payment of a total of up to $7.5 million of additional shares of stock deliverable from 2021 through 2024 based on the achievement of agreed commercial milestones.

Marrone Bio announced separately today that it has established a $36.6 million financing facility through a right to call the exercise of certain existing warrants. Any resulting cash raised is anticipated to be sufficient to fund the current operating plan to a breakeven level, as well as fund near-term strategic alternatives such as the Pro Farm acquisition.

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