Dec 5 2006
Monsanto Company and Landec Corporation (Nasdaq: LNDC) announced two separate agreements today, both of which are expected to broaden their reach and product offerings to U.S. farmers. The two agreements are potentially valued at more than $70 million.
In the first transaction, Monsanto's American Seeds, Inc. (ASI) subsidiary announced that it has acquired Landec's direct marketing and seed sales company, Fielder's Choice Direct (FCD), based in Monticello, Ind. The sales price for FCD was $50 million in cash paid at the close on December 1, 2006 with a potential additional earn-out amount of up to $5 million based on FCD results for the twelve months ended May 31, 2007.
"We are pleased to enter into this agreement with Monsanto, the world's leading ag technology company," said Gary Steele, president and chief executive officer for Landec. "Based on its long-term investment in research and development, Monsanto is a market leader in seed genetics and traits, and will now be able to utilize Fielder's Choice Direct's unique channel of distribution for seed-based products."
Under the first agreement, ASI will acquire FCD's customer call center operation, which serves customers across the Midwest and is the largest telemarketer of corn seed sales. ASI will also acquire Landec's two seed brands: Fielder's Choice Direct and Heartland Hybrids. Collectively, these two seed brands represent slightly more than one percent of U.S. corn seed sales. These seed brands will join the ASI family of regional seed offerings which serves farmers with a technology-rich, locally-oriented business model.
"Fielder's Choice Direct has a long track record of serving farmers with a personal touch and a unique business model that is unparalleled today in the agriculture sector," said Carl Casale, executive vice president of North American commercial for Monsanto. "The addition of the FCD business model complements our existing dealer, retail and licensee channels, and bolsters our commitment of delivering high-quality seed and trait technologies to U.S. farmers, regardless of their channel preference."
In the second transaction, the parties announced that they have entered into a five-year global technology license agreement for Landec's Intellicoat® polymer seed coating technology. Under the five-year agreement, Monsanto will become the exclusive sales and marketing agent for Landec's Intellicoat seed coating technology in corn, oilseeds and cotton. Monsanto also receives an option to buyout the Intellicoat seed coating technology.
Landec's Intellicoat seed coating technology offers several unique benefits to farmers including the ability to delay seed germination until the soil reaches the optimal temperature. This approach offers farmers the option to expand their planting window, lower on-farm costs, and reduce the risks associated with late planting.
"We're pleased that Monsanto will have worldwide use of our Intellicoat temperature-activated seed coating technology for the coating and treating of a wide variety of seeds," said Steele. "This agreement provides Landec and Monsanto with a great opportunity to showcase and advance our Intellicoat technology platform and the benefits of this technology for the farmer."
"Meeting our farmer customers needs means that we're constantly evaluating new and innovative seed and trait technologies which can help farmers boost and preserve the yield potential of their crops," Casale said. "We're looking forward to licensing Landec's Intellicoat coating technology, and offering farmer's another tool as they work to meet the evolving demands facing the agriculture industry."