Arcadia Biosciences Inc (NASDAQ:RKDA) said it has entered into a binding term sheet to acquire the commercial and genetic assets of Oregon-based industrial hemp breeding and seed company Industrial Seed Innovations (ISI).
The firm, which focuses on enhancing the quality and nutritional value of crops and food ingredients, said ISI’s Rogue, Deschutes and Umpqua seed varieties will become part of Arcadia's portfolio, alongside the company's GoodHemp line of genetically superior hemp seeds, transplants, flowers and extracts.
Arcadia said the acquisition will “significantly broaden and accelerate” the commercialization of its hemp-related breeding platform, as well as establish a breeding research and development facility in the Pacific Northwest, a key hemp production area.
The acquisition is expected to be neutral to accretive to cash flow from operations in 2020 and meaningfully accretive in 2021. The transaction is scheduled to close in the third quarter of 2020, although the financial details have not been disclosed.
In a statement, Arcadia’s president and chief executive Matthew Plavan said: "Industrial Seed Innovations brings tremendous talent, an impressive intellectual property and genetics portfolio and a solid and synergistic customer base to Arcadia.
"This transaction will strengthen our hemp breeding and seed production capabilities, augment and leverage our proprietary ArcaTech discovery platform and further position us as a leader in delivering high-value, premium hemp seeds."
"With the additional capital secured last month to underwrite our strategy to accelerate growth through the acquisition of assets, this transaction will add value and speed to our hemp and hemp products business, underscoring our ambitious plans for market leadership", Plavan added.
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