MENLO PARK, Calif. and ST. LOUIS, Dec. 4 /PRNewswire-FirstCall/ -- Monsanto Company and Landec Corporation 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(R) 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."
About Landec Corporation
Landec Corporation designs, develops, manufactures and sells temperature- activated and other specialty polymer products for a variety of food, agricultural and licensed partner applications. The Company's temperature- activated polymer products are based on its proprietary Intelimer(R) polymers which differ from other polymers in that they can be customized to abruptly change their physical characteristics when heated or cooled through a pre-set temperature switch. For more information about the Company visit Landec's website at http://www.landec.com.
About American Seeds, Inc.
American Seeds, Inc. (ASI), which was formed by Monsanto in 2004, serves as a holding company for regional seed companies that market primarily corn and soybeans. ASI provides support for these regional seed businesses with capital, genetics and technology investments. These investments allow the operating companies of ASI to more directly connect their customers to significant innovations in genomics-based breeding and other new technologies while continuing to operate autonomously and locally, providing great services to their customers. For more information on ASI, see: http://www.americanseedsinc.com.
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.
Landec Corporation Cautionary Statements Regarding Forward-Looking Information:
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially. These risk factors are listed in the Company's Form 10-K for the fiscal year ended May 28, 2006 (See item 1A: Risk Factors). As a result of these and other factors, the Company expects to continue to experience significant fluctuations in quarterly operating results and there can be no assurance that the Company will remain consistently profitable. The Company undertakes no obligation to update or revise any forward-looking statements whether as a result of new developments or otherwise.
Monsanto Company 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, including proceedings related to Solutia Inc.; developments related to foreign currencies and economies; successful completion and operation of recent and proposed acquisitions, including Delta and Pine Land Company; 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 periodic report to the SEC. 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.