Last updated on July 2nd, 2019 at 09:05 pm
Wauwatosa-based Agro BioSciences Inc. has been acquired by Ewing, N.J.-based Church & Dwight Co. Inc. for $75 million, plus an earnout of up to $25 million based on future performance. The transaction closed May 1.
Founded in 2013, Agro BioSciences uses the latest advancements in molecular biology to identify the microbial elements of food and then uses that information to advance three divisions of the company: human probiotics and wellness; bio-protection; and agriculture. Church & Dwight acquired it because it develops custom probiotic products for poultry, cattle and swine. Agro’s annual revenue is about $11 million.
“The joining together of Agro BioSciences and Arm & Hammer sets a path for future success leveraging the trusted Arm & Hammer brand with the extensive development platforms of Agro BioSciences,” said Tom Rehberger, president of Agro BioSciences. “Together, we will work to increase agricultural productivity through natural solutions that improve the quality and safety of the food that reaches consumers’ tables.”
Church & Dwight, a $3.4 billion company that owns major consumer packaged goods brands like Arm & Hammer, OxiClean, Orajel and Trojan, will integrate Agro with its animal productivity business. According to Church & Dwight, Agro is expected to experience significant growth because of increasing demand for probiotic products used to keep animals healthy and productive on antibiotic-free farms.
Church & Dwight funded the acquisition with debt. Agro is expected to be neutral to its earnings per share this year, but accretive next year.
“We are very excited about this integration because it further supports our long-term plan to grow, evolve and diversify our business through unique advancements in animal and agricultural productivity,” said Scott Druker, general manager of Arm & Hammer Animal Nutrition. “We are now a worldwide leader in providing the broadest portfolio of both microbial and nutrition solutions and services backed by an extensive R&D pipeline.”
Last year, Agro was a recipient of a BizTimes I.Q. Award for its innovative microbial solution development. At that time, Rehberger said its solutions were in clinical trials and did not expect its human products to hit the market until 2018.
In 2016, approximately 10 to 15 percent of producers in the broiler industry and 50 to 55 percent of producers in the turkey industry were using Agro-BioSciences microbial products.
Agro is based in the Technology Innovation Center in the Milwaukee County Research Park in Wauwatosa. It started with four employees in 800 square feet in the center and grew to 38 and a 10,000-square-foot space. Now, Agro plans to move its operations to a space double the size in Waukesha at the end of May, said Guy Mascari, executive director of the park.
“Obviously we’re really pleased,” Mascari said of the acquisition. “That’s what we’re here for, to contribute to the growth of companies like Agro. Especially in their case, seeing how beneficial it was to them to be located here. One of the key factors in their success, according to them and what I’ve observed, is our abil to build out new lab space, manufacturing and warehouse space.”
A spinoff company of Agro BioSciences, Third Wave Bioactives LLC, also announced today it has started operating as an independent company focused on helping food manufacturers develop natural foods. Its commercial line of products, BioVontage, includes cultured dextrose and whey-based products that help create flavors while maintaining shelf life. That spinoff company will continue to be located in about 2,000 square feet in the research park.
At $75 million plus, the Agro sale is among the largest Wisconsin startup exits in recent memory. George and Julie Mosher sold Milwaukee-based National Business Furniture for $85 million to German company TAKKT in 2006. In 2010, ZyStor Therapeutics Inc. was acquired by BioMarin Pharmaceutical Inc. for $22 million upfront, with another $93 million earnout. Waukesha-based biotech firm Prodesse Inc. was sold by Tom Shannon and investors sold for $60 million to Gen-Probe Inc. in 2009, and New Berlin-based costume e-retailer BuySeasons Inc., which Jalem Getz and investors sold to Liberty Media Corp. in 2006 for more than $55 million. Those deals are included in a recent BizTimes Milwaukee cover story, “Built to sell,” detailing successful local exits.
“In a short time, the Agro Biosciences team has built a robust, technology-based company that has attracted a large corporation to our state,” said Kathleen Gallagher, executive director of the Milwaukee Institute, a nonprofit computational science and technology organization dedicated to helping economic and workforce development efforts in the region. “This is a moment to celebrate. These types of transactions often create a virtuous cycle where stakeholders use some of their proceeds to invest in the next crop of startups. We’re excited to see the positive ripples that flow from this exit.”