S&W Seed Company 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,” says 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 concludes, “S&W has a defined plan in place to recognize significant sales and cost synergies that we believe will position the acquired operations to be a significant contributor of profits in fiscal 2020 and beyond.”
