Monsanto Company and De Ruiter Seeds
Monsanto Company Announces Agreement to Acquire De Ruiter Seeds, a Leading Global Vegetable Seed Company
St Louis, Missouri (ots/PRNewswire)
- Acquisition Expected to Expand Monsanto's Vegetable Seed Portfolio in the Fast-Growing Protected-Culture Segment, Enable it to Accelerate the Delivery of Value-Added Products to Growers and Consumers
Monsanto Company (NYSE: MON) announced today that it signed a definitive agreement to acquire De Ruiter Seeds Group B.V., a Dutch-holding company that owns and operates De Ruiter Seeds, for EUR546 million, or greater than US$800 million depending on currency exchange rates, less net debt. Once completed, the acquisition is expected to build on the strength of Monsanto's vegetable seed business as well as enhance the company's growth in the protected-culture segment, the fastest-growing space within the vegetable seeds industry.
"De Ruiter Seeds is a leading provider of high-quality products to growers within the protected-culture vegetable seed market," said Terry Crews, chief financial officer of Monsanto and chief executive officer of Seminis, a vegetable seeds division of Monsanto. "When combined with the operational improvements we've made in our Seminis business and the growth opportunity of our marker-assisted breeding platform, this acquisition represents an opportunity to not only transform, but further grow our vegetable seed business in a high-value, fast-growing segment of the market."
"We are pleased to have entered into this agreement with Monsanto who is a global leader in agriculture technology," said Biense Visser chief executive officer of De Ruiter Seeds. "De Ruiter's investment in high-quality seeds, our leadership in the protected-culture market, and our dedicated professionals will be a valuable addition to Monsanto's business and a new platform for its advanced breeding technology and value-added products. We look forward to working with Monsanto to deliver novel value-added vegetable seed products to growers and consumers around the world."
De Ruiter acquisition set to offer synergistic benefits to Monsanto's vegetable seed platform
"De Ruiter Seeds mission of product leadership fits well with our seeds and traits growth strategy and, upon completion, this acquisition is expected to transform Monsanto's vegetable seed platform into a US$1 billion revenue business by 2012," said Crews.
Monsanto and De Ruiter Seeds believe the acquisition will create a number of synergistic benefits between the companies. Monsanto's established and growing research in marker-assisted breeding is expected to offer an immediate jump-start for De Ruiter Seeds breeders. The combination of De Ruiter Seeds' rich pool of genetics and their operating experience within the protected-culture segment is expected to further enhance Monsanto's service of the vegetable seed market. Together, these synergistic benefits are expected to enable both companies to offer better products to growers and do so faster than either company could have done on its own.
De Ruiter Seeds to serve as protected culture business for Monsanto's vegetable seeds portfolio
Upon completion of the transaction, Monsanto's vegetable seed business will serve its customers through three dedicated platforms including: protected-culture, open field and regional vegetable seed businesses. The De Ruiter Seeds business will serve the protected-culture vegetable seed market, Seminis will serve the open-field vegetable seed market, and the International Seed Group, Inc. (ISG) will serve customers of regional seed businesses.
The three-prong approach is expected to enable Monsanto's vegetable seed businesses to focus on serving the needs of growers and their retail distribution customers across these segments. To support these segments, each business will benefit from Monsanto's R&D engine, advanced breeding techniques, global germplasm network and information technology platforms. Upon completion of the acquisition, Monsanto will work to incorporate the back-office support functions at De Ruiter including finance and IT as quickly as possible.
Biense Visser, the president and chief executive officer of De Ruiter Seeds, will continue to lead De Ruiter Seeds business. The De Ruiter Seeds business will report into Kerry Preete who currently leads Monsanto's vegetable seed businesses.
De Ruiter Seeds serves as leader in fast-growing protected culture segment
De Ruiter Seeds is one of the world's leading vegetable seed breeding companies. The Netherlands-based company had global sales of approximately EUR108 million in 2007. The company works with crops such as tomatoes, cucumbers, melons, peppers and rootstock (used for tomato culture purposes); and focuses on breeding novel varieties for the protected-culture segment, commonly known as greenhouse or plastic house agriculture.
De Ruiter Seeds currently holds the number one global sales position for tomato and rootstock within the protected-culture segment, as well as a top-five position for cucumbers and peppers in this segment. De Ruiter Seeds also holds a top-five position for melons within the vegetable seed market.
The protected-culture segment is the fastest-growing space within the vegetable seed industry today, with an estimated compound annual sales growth rate of approximately 8 percent to 10 percent over the next five years. Industry estimates suggest that the segment realized over US$600 million in sales worldwide in 2007. The protected-culture segment is growing as consumers in North America and Europe demand greater quantities of fresh produce year round, and this pattern is expected to continue as consumers throughout Asia increase their demand for fresh vegetables and implement dietary improvements.
Financial Implications of the Acquisition
Monsanto intends to finance the acquisition with cash. The acquisition is expected to be accretive to Monsanto's earnings per share (EPS), cash flow and revenue growth by the second-full fiscal year following closure of the acquisition.
The proposed acquisition requires review and approval by the appropriate regulatory authorities, including several European-based regulatory authorities. Because of these required regulatory approvals, no timeframe has been announced for the closing of this transaction.
Additional Details
In conjunction with today's announcement, Monsanto posted a related presentation to the Investor section of the company's web site at http://www.monsanto.com/investors. This presentation outlines additional information on the De Ruiter Seeds business and Monsanto's research in vegetable seeds.
About Monsanto Company
Monsanto Company is a leading global provider of technology-based solutions and agricultural products that improve farm productivity and food quality. For more information, please visit the company's web site at http://www.monsanto.com.
About De Ruiter Seeds
De Ruiter Seeds breeds, produces and sells hybrid vegetable seeds for top vegetable products such as tomato, cucumber, aubergine, pepper, melon and rootstock. De Ruiter Seeds is one of the top breeding companies in the world. For more information, please visit the company's web site at http://www.deruiterseeds.com.
Cautionary Statements Regarding Forward-Looking Information:
Certain statements contained in this release are "forward-looking statements," such as statements concerning the company's anticipated financial results, current and future product performance, regulatory approvals, business and financial plans and other non-historical facts. These statements are based on current expectations and currently available information. However, since these statements are based on factors that involve risks and uncertainties, the company's actual performance and results may differ materially from those described or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, among others: continued competition in seeds, traits and agricultural chemicals; the company's exposure to various contingencies, including those related to intellectual property protection, regulatory compliance and the speed with which approvals are received, and public acceptance of biotechnology products; the success of the company's research and development activities; the outcomes of major lawsuits; developments related to foreign currencies and economies; successful operation of recent acquisitions; fluctuations in commodity prices; compliance with regulations affecting our manufacturing; the accuracy of the company's estimates related to distribution inventory levels; the company's ability to fund its short-term financing needs and to obtain payment for the products that it sells; the effect of weather conditions, natural disasters and accidents on the agriculture business or the company's facilities; and other risks and factors detailed in the company's most recent report on Forms 10-Q and 10-K. Undue reliance should not be placed on these forward-looking statements, which are current only as of the date of this release. The company disclaims any current intention or obligation to update any forward-looking statements or any of the factors that may affect actual results.
Notes to editors: Seminis is a trademark of Monsanto Company and its wholly owned subsidiaries. De Ruiter Seeds is a trademark of De Ruiter Seeds.
Contact:
Contact Media: Marleen van Balkom, De Ruiter Seeds,+31-0-10-5292-674;
Media: Lee Quarles, Monsanto, +1-314-694-2330; Media: Mica Veihman,
Monsanto/Seminis, +1-314-694-2992; Analysts: Scarlett Lee Foster,
Monsanto, +1-314-694-8148