Land O'Lakes Inc. said Friday it will acquire a California biotechnology company for $17.2 million.
Publicly traded Ceres, Inc., based in Thousand Oaks, Calif., develops seeds designed to increase crop productivity and food quality. It will become a Land O'Lakes subsidiary and complement its existing forage development wing, Forage Genetics International (FGI).
"The acquisition brings complementary strengths together, adds new advanced plant breeding and biotechnology to the FGI research and development pipeline and accelerates the process of bringing new forage solutions to existing and new markets," said Chris Policinski, president and CEO of Arden Hills-based Land O'Lakes, in a news release.
By tying the knot with Ceres, Policinski added, Land O'Lakes hopes to offer more products like alfalfa, corn silage and forage sorghum, a naturally drought-tolerant crop. In recent years, Ceres has focused on these products, Ceres CEO and President Richard Hamilton said in the news release.
"Our shift away from bioenergy and Brazil and into forages has been highly successful to date, and is culminating now in this proposed merger transaction with a pre-eminent leader in forage crops," Hamilton said.
Ceres reported a $28.2 million loss on revenue of $2.7 million for its most recent fiscal year ended Aug. 31, 2015, compared with a $29.3 million loss on revenue of $2.4 million the previous year.
Under the deal, which is subject to regulatory approval, Land O'Lakes would buy in cash all outstanding shares in Ceres for 40 cents a share at an 81 percent premium. Ceres shares were priced at around 22 cents at closing Thursday. Its shares closed Friday at 38 cents.