Winning bid of $26.5 million; Transformational acquisition expected to significantly expand S&W ' s sorghum operations
S&W to discuss transaction during conference call with slide presentation scheduled for Thursday, November 1, 2018 at 10:00am ET (7:00am PT)
For Immediate Release
|Robert Blum, Joe Dorame, Joe Diaz
Lytham Partners, LLC
Chief Financial Officer
S&W Seed Company
SACRAMENTO, California – November 1, 2018
S&W Seed Company (Nasdaq: SANW) announced today that it has acquired certain assets and assigned contracts of Chromatin, a U.S.-based sorghum operator which entered into receivership earlier this year. The purchase price was $26.5 million.
“We are excited about this announcement and the opportunity it provides S&W to significantly expand our presence in the sorghum industry and evolve into an elite middle market agricultural company,” said Mark Wong, CEO of S&W Seed Company. “Chromatin originated as an agricultural biotech company that had transitioned to an integrated global sorghum seed company. We believe the sorghum hybrids that have been developed to date are some of the best in the industry, with a development pipeline of products that include key traits that are anticipated to be first to market. In addition to a strong product portfolio, they have established a distribution network of sales representatives, 500+ farmer-dealers, and channel partners that we believe will allow for significant cross selling synergies with our existing alfalfa sales organization. This is precisely the type of opportunity the management team and board has been seeking to accelerate our go forward strategic plan.”
Anticipated Key Attributes of the Chromatin Assets Include:
- Pure play sorghum company with a platform for growth.
- Diverse sorghum hybrid product portfolio of grain, forage, food grade, and sweet varieties that support multiple end markets with industry-leading performance attributes.
- Product portfolio of unique hybrids addressing multiple maturities, localized and regional adaptions, and contain key tolerance and resistance traits.
- Pipeline of new products include expansion of Chromatin’s existing sugarcane aphid (SCA) resistance to its product portfolio, an industry first herbicide resistance that S&W believes will be transformational to the sorghum industry, and additional genes expected in the years to come.
- A world class R&D and testing program that should enable superior products to be brought to market faster than competitors through the development of approximately 300 molecular markers. This unique program is expected to allow the breeding team to identify and breed desirable traits, especially recessive traits, into commercial hybrids with improved efficiencies.
- An extensive global sales network which includes company sales representatives in the U.S., distribution to a 500+ farmer-dealer channel, and an expansive network of worldwide distributors. Selected geographic markets are anticipated to be combined with S&W sales people into one combined sales force selling sorghum, alfalfa and sunflower products.
- Well maintained and modernized production plants with nearby contracted production acreage in Texas.
- Key product registrations in international markets, including Europe.
Mr. Wong concluded, “S&W has a defined plan in place to recognize significant sales and cost synergies that we believewill position the acquired operations to be a significant contributor of profits in fiscal 2020 and beyond.”
S&W will issue a slide presentation that will accompany the live conference call. The presentation will be available in the Investor Relations section of the Company’s website at http://www.swseedco.com/investors or will be accessible through the webcast portal.
S&W Seed Company has scheduled a conference call scheduled for Thursday, November 1, 2018, at 10:00 am ET (7:00 am PT) to discuss the Chromatin transaction. Interested parties can access the conference call by dialing (844) 861-5498 or (412) 317-6580 or can listen via a live Internet webcast, which is available in the Investor Relations section of the Company’s website at http://www.swseedco.com/investors. A teleconference replay of the call will be available for three days at (877) 344-7529 or (412) 317-0088, confirmation #10125853. A webcast replay will be available in the Investor Relations section of the Company’s website at http://www.swseedco.com/investors for 30 days.
About S&W Seed Company
Founded in 1980, S&W Seed Company is a global agricultural company headquartered in Sacramento, California. S&W’s vision is to be the world’s preferred proprietary seed Company which supplies a range of forage and specialty crop products that supports the growing global demand for animal proteins and healthier consumer diets. S&W is a global leader in alfalfa seed and sorghum hybrid, with significant research and development, production and distribution capabilities. S&W also provides hybrid sunflower and is utilizing its research and breeding expertise to develop and produce stevia, the all-natural, zero calorie sweetener for the food and beverage industry. For more information, please visit www.swseedco.com.
Safe Harbor Statement
This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may,” “future,” “plan” or “planned,” “will” or “should,” “expected,” “anticipates,” “draft,” “eventually” or “projected.” Forward-looking statements in this release include, but are not limited to, statements concerning the acquisition of the Chromatin assets, the expected benefits of the acquisition, and the statements contained under “Key Attributes of the Chromatin Assets Include” above. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risk that the acquisition may not provide the anticipated benefits; the sorghum market may not meet our expectations; and our strategic initiatives may not achieve the expected results, as well as risks associated with our ability to successfully optimize and commercialize our business. These and other risks are identified in our filings with the Securities and Exchange Commission, including without limitation our Annual Report on Form 10-K for the fiscal year ended June 30, 2018, and in our other filings subsequently made with the Securities and Exchange Commission. All forward-looking statements contained in this press release speak only as of the date on which they were made. We do not undertake any obligation to publicly update any forward-looking statements, whether as a result of the receipt of new information, the occurrence of future events or otherwise.