DAVIS, Calif., June 10, 2020 /PRNewswire/ -PRESS RELEASE- Arcadia Biosciences Inc., a biotechnology company focused on enhancing the quality and nutritional value of crops, today announced it has entered into a binding term sheet with Industrial Seed Innovations, 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 ArcaTech 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 GoodHemp line of 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.
"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," Plavan said.
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 will 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."