Marrone Bio Innovations Inc (NASDAQ:MBII) revealed Wednesday that it has acquired all the rights and assets to Jet Ag and Jet Oxide products that help control fungal and bacterial diseases in agriculture from Florida-based Jet Harvest Solutions.
In morning trade on Nasdaq, Marrone Bio shares were 1.9% higher at $1.63.
In a statement, the Davis, California-based company said the transaction builds on a two-year relationship and prior distribution agreement between Jet Harvest and Marrone Bio. Going forward, the portfolio will be sold through Marrone Bio’s existing sales force and distribution network, except for the post-harvest business, which has been licensed back to Jet Harvest Solutions.
With gross margins in line with Marrone Bio’s current portfolio of products, the Jet Ag and Jet Oxide product lines are expected to add to the company’s revenues in 2019 and be accretive to earnings within two years.
The company said the sticker price for the assets is roughly $2.5 million in cash, plus five-yearly earn-out payments based on certain sales. In addition, Marrone Bio has retained the founders of Jet Harvest Solutions on a two-year consulting contract.
“We continue to expand our portfolio of products for integrated pest management, giving growers more tools to control diseases, improve plant health, and enhance grower return on investment,” said Marrone Bio CEO Pam Marrone in a statement.
“The Jet Ag product line delivers the kind of results we demand of our products: proven performance, capacity for significant revenue growth and attractive gross margins,” she added.
Strong fit with Marrone Bio’s strategy
The products — which are used in specialty agricultural and field crops as well as greenhouse and irrigation applications — are expected to be a strong fit with Marrone Bio’s BioUnite strategy.
The company said Jet Ag and Jet Oxide can also be used in post-harvest storage, greenhouse surfaces/irrigation systems and agriculture irrigation water and drainage ditches.
“We look forward to continuing our relationship with Jet Harvest, and anticipate both commercial and financial benefits from the addition of Jet Ag to our product portfolio, especially with our Regaliaâ and Stargusâ families of fungicides,” noted Kevin Hammill, chief commercial officer at Marrone Bio.
“Jet Ag gives us the opportunity to immediately expand into new markets with a product that has excellent performance and consistency,” he added.
The global fungicide market is pegged at $16.5 billion. The agricultural disinfectant market which is worth $1.9 billion, is expected to grow to $2.1 billion by 20212.
Headquartered in Davis, California, Marrone Bio provides bio-based pest management and plant health products for the US and international agricultural and water markets.
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