When Agro Biosciences was purchased last May by Ewing, New Jersey-based Church & Dwight Co. Inc., it happened much earlier than Agro president Tom Rehberger expected.
Rehberger founded the then-Wauwatosa-based microbiological animal products manufacturer in 2013 after selling his previous startup, Pewaukee-based Agtech Products Inc. In four years, Agro had grown from four employees to more than 36, and boasted $11 million in revenue.
The $75 million-plus acquisition, the largest startup exit in Wisconsin since 2006, was spurred by Church & Dwight’s interest in using Agro’s innovative custom poultry, cattle and swine probiotic products to improve and diversify its Princeton, New Jersey-based Arm & Hammer Animal Nutrition division, which produces nutritional feed ingredients for livestock.
The acquisition allowed Arm & Hammer to enter the probiotic market space during a time when the food and agricultural industries are increasingly demanding bio-based products to better support production and prevent illness in animals on antibiotic-free farms.
“Anytime a small company grows and finds a niche for an emerging technology, like probiotics that are taking off in the poultry industry, it’s going to be a target for big companies that had never figured out how to innovate,” Rehberger said. “Innovation requires a lot of moving parts that have to all work together within a company. Sometimes, for big companies, that’s almost impossible.”
Rehberger now oversees innovation and product development for Church & Dwight’s targeted microbial solutions – the term Church & Dwight has coined to more accurately describe Agro’s research, development and production of dietary supplements containing living microorganisms that balance bacteria in the digestive tract.
Almost one year after the acquisition, the company’s trajectory has evolved. The combined company, collectively made up of about 100 employees − 30 in Wisconsin and operating under the Arm & Hammer Animal Nutrition name − has been able to reach new market segments it had barely penetrated before they joined forces.
Agro brought to Arm & Hammer its poultry market expertise and in return, it gained resources and manpower for new products in the cattle market, an unfamiliar space.
Agro also joined Arm & Hammer on new R&D efforts to study the interactions between live microbials and yeast in livestock feed and, on the human side, incorporating probiotic strains into Church & Dwight’s adult multivitamin brand, Vitafusion.
In May 2017, the company renovated an existing building and moved its Wisconsin operations to Waukesha.
“This is really a collaboration,” Rehberger said. “It’s a way to look at which company fits best in different positions and do what’s right for the business. We are the right piece that actually fit within the Arm & Hammer nutrition team.”
Rehberger believes the future of biotechnology in Wisconsin – especially in Madison and Milwaukee – holds great opportunity as consumer trends tilt toward clean labels and biological, rather than chemical, methods of preserving and processing food.
Leading the charge is the state’s historic and well-established fermentation industry – its beer, cheese and sausage producers – and the growing number of microbial industry startups, including Agro Biosciences’ Wauwatosa-based spin off, Third Wave Bioactives, a producer of natural preservatives and flavors for food using antimicrobial bacteria.
“Milwaukee and southeastern Wisconsin have a great opportunity to leverage those core competencies relative to fermentation and the health benefits of live microbial and yeast products,” he said.