Bayer CropScience — a branch of the German corporate giant Bayer AG — announced this week that it will purchase AgraQuest Inc., a Davis-based biotech company, for $425 million plus milestone payments.
Bayer’s acquisition of AgraQuest is the largest transaction involving a Davis-based biotech company since St. Louis-based corporate giant Monsanto acquired Calgene in a series of moves between 1995 and 1997. The gradual acquisition of Calgene by Monsanto (which initially bought a 49 percent stake in Calgene, and later bought the remainder of the company) reportedly ran to some $250 million in total.
AgraQuest, founded in Davis in 1995, is a global supplier of innovative biological pest management solutions based on natural microorganisms. The acquisition of AgraQuest will enable Bayer CropScience to build a leading technology platform for green products and to strengthen its strategically important fruits and vegetables business, while also opening new opportunities in other crops and markets.
Green products control a broad spectrum of pests and diseases and offer farmers integrated pest management programs to minimize development of resistance and maximize crop yields. The acquisition is subject to approval by the relevant international authorities.
Through the acquisition, Bayer CropScience will integrate AgraQuest’s biopesticide production facility in Tlaxcala, Mexico, as well as the company’s research and development site in Davis. AgraQuest has a staff of about 250 full-time employees.
“The growing fruits and vegetables market, which today accounts for more than 25 percent of our sales, is of strategic importance for us,” Sandra Peterson, CEO of Bayer CropScience, said in a news release. “We plan to achieve (sales of 3 billion euros) in this segment by 2020 and with the acquisition of AgraQuest we are underlining our growth ambitions.
“We are the first in our industry to offer farmers a truly comprehensive range of integrated crop solutions based on seeds, traits and combined chemical crop protection and biological control,” she added.
The tailor-made portfolio and promising research-and-development pipeline of AgraQuest will help Bayer CropScience build a broad-based technology platform to bring a new generation of innovative products to the market, Peterson said. Furthermore, this acquisition will help to optimally use R&D, manufacturing and market synergies, creating value for both Bayer CropScience and its customers.
“AgraQuest expands our existing biological pest control portfolio centered on our successful Votivo biological nematicide, and it allows us to further leverage the biotechnology platform we have acquired through Athenix Corporation,” Peterson said.
Marcus Meadows-Smith, AgraQuest CEO, expressed delight at the acquisition.
“We are proud to become part of Bayer CropScience,” he said. “AgraQuest is ideally positioned as a technology leader in the global biological market, and by joining forces with Bayer CropScience we will be able to develop revolutionary, tailor-made biological solutions.
“Every AgraQuest employee is passionate about developing innovative solutions for better food, and now the products developed through their hard work will be made available to farmers in every corner of the world.”
AgraQuest has its own sales force in the North American Free Trade Agreement crop protection market, and sells its green products through a network of distributors and partners in other global regions.
AgraQuest’s current product portfolio includes well-established brands such as Serenade, Rhapsody, Sonata and Ballad fungicides and Requiem insecticides, which provide disease and pest control and will complement Bayer CropScience’s product offering.
Bayer CropScience also will leverage AgraQuest’s technology platform and its promising pipeline of new biological control agents. Several new pipeline products — which include acaracides, fungicides and nematicides, among others — are under development, and have undergone successful early field evaluations.
AgraQuest products are available in more than 30 countries, including the United States, Canada, Mexico, Brazil and European countries including the United Kingdom, Germany, France and Italy. AgraQuest products are used in diverse market segments such as fruits and vegetables, broad-acre crops, post-harvest protection, turf, home and garden and animal health.
Bayer CropScience, formed in 2002, is a subgroup of Bayer AG with annual sales of 7.255 billion euros. Bayer CropScience one of the world’s larger science companies in the areas of crop protection, non-agricultural pest control, seeds and traits. The company offers a range of products and extensive service backup for modern, sustainable agriculture and for non-agricultural applications. Bayer CropScience has a global workforce of 21,000 and is represented in more than 120 countries.
The company now known as Bayer AG was founded in Germany in 1863. For more than a century, Bayer Aspirin has been the company’s flagship product, but the company also produces Alka-Seltzer, Flintstones Vitamins and One-A-Day Vitamins, among other products.
In 1978, Bayer acquired Berkeley-based Cutter Laboratories, known for its insect repellent. In fiscal 2011, Bayer AG employed about 112,000 people and had global sales of 36.5 billion euros. Bayer AG produces a diverse portfolio of pharmaceutical and chemical products. Forbes Magazine recently ranked it as Germany’s 15th largest corporation.