Loudwater Trust Limited
Disposal of investment
4th July 2012
Loudwater Trust Limited ("Loudwater" or the "Company") (AIM: LWT) is pleased to announce the conditional disposal of its shareholding in AgraQuest, Inc. to Bayer Cropscience LLC, a subsidiary of Bayer AG, for an initial cash consideration of approximately £27.3 million or 45.4 pence per share, which compares to the carrying value of the investment as at 31 March 2012 of £6.8 million or 11.3 pence per share and an investment cost of £4.8 million, and the Company's current market capitalisation of £16.0 million or 26.5 pence per share. Of this amount approximately £3.3 million will be initially held in escrow against potential indemnification claims. In addition there is contingent consideration payable should AgraQuest achieve certain performance milestones in future years. The maximum contingent consideration that could be due to Loudwater is £3.5 million. The initial proceeds from the disposal will be used to make a further cash return to shareholders.
Completion of the disposal is subject to satisfaction of a number of customary conditions including, regulatory clearances.
A further announcement will be made in due course on completion, together with an update on the return of cash to shareholders.
The full text of an announcement by Bayer Cropscience is set out below.
"Bayer CropScience acquires US-based biological company AgraQuest for close to US$ 500 million
Monheim, July 3, 2012 - Bayer CropScience announced today that it has signed an agreement to purchase AgraQuest Inc. for a purchase price of US$ 425 million (approximately EUR 340 million) plus milestone payments. AgraQuest, headquartered in Davis, California, USA, is a global supplier of innovative biological pest management solutions based on natural microorganisms. This acquisition 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 authorities.
"The growing fruits and vegetables market, which today accounts for more than 25 percent of our sales, is of strategic importance for us. We plan to achieve EUR 3 billion sales in this segment by 2020 and with the acquisition of AgraQuest we are underlining our growth ambitions," said Sandra Peterson, CEO of Bayer CropScience, sending a strong signal to the market. "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 R&D pipeline of AgraQuest will help Bayer CropScience to build a broad-based technology platform to bring a new generation of innovative products to the market. 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," said Sandra Peterson.
"We are proud to become part of Bayer CropScience," AgraQuest CEO Marcus Meadow-Smith commented. "AgraQuest is ideally positioned 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 a better world, and being part of a strong global company such as Bayer CropScience will allow the products developed through their hard work to reach farmers in every corner of the world." AgraQuest has its own sales force in the NAFTA crop protection market, and sells its green products through a network of distributors and partners in other global regions.
The company's current product portfolio includes well-established product brands such as Serenade®, Rhapsody®, Sonata® and Ballad® fungicides and Requiem® insecticides, which provide effective disease and pest control and will complement Bayer CropScience´s product offering. Bayer CropScience will also leverage AgraQuest's technology platform and its promising pipeline of new biological control agents. Several new pipeline products, which include acaracides, fungicides and nematicides, amongst others, are under development, and have undergone successful early field evaluations. Through the acquisition Bayer CropScience will integrate AgraQuest's state-of-the-art biopesticides production facility in Tlaxcala, Mexico, as well as the company's R&D site in Davis. AgraQuest employs a total staff of approximately 250 full-time employees.
AgraQuest products are available today in more than 30 countries including Canada, USA, Mexico, Brazil and European countries including the United Kingdom, Germany, France and Italy. They are used in diverse market segments such as fruits and vegetables, broad-acre crops, post-harvest protection, turf, home and garden and animal health.
About Bayer CropScience
Bayer is a global enterprise with core competencies in the fields of health care, nutrition and high-tech materials. Bayer CropScience, a subgroup of Bayer AG with annual sales of EUR 7.255 billion (2011), is one of the world's leading innovative crop science companies in the areas of crop protection, non-agricultural pest control, seeds and traits. The company offers an outstanding 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. This and further news is available at: www.press.bayercropscience.com.
AgraQuest, Inc. is a global biotechnology company that focuses on discovering, manufacturing and marketing highly effective biopesticide products to increase agricultural production. As a leader in green agriculture and the emerging low chem sector, AgraQuest is at the forefront of changes in food production by providing growers with solutions that offer best-in-class control while reducing the chemical load on the environment and creating sustainable agriculture opportunities. Through its Agriculture and BioInnovations divisions, AgraQuest focuses on natural products designed for pest control and yield improvements for global agriculture, the garden and in food safety markets. AgraQuest's major shareholders include Otter Capital, TPG Biotechnology Partners, Loudwater Investment Partners, Generation Investment Management, Halcyon Capital, SwissRe and several Swiss sustainable investment funds. For more information, visit www.agraquest.com."
For further information
Loudwater Investment Partners Limited
Edward Forwood +44 (0)20 3372 6400
Panmure Gordon (UK) Limited
Andrew Potts +44 (0)20 7459 3600