Agrisoma Biosciences management acquires 22% stake via equity investment 

What’s up with carinata? 2015 looks like an inflection year for the non-irrigated, heat-tolerant, sandy-soil loving canola cousin that is ready-to-wear for aviation biofuels and biodiesel.

Meanwhile, the management team doubles down as the marketing year is underway.

In Quebec, Agrisoma Biosciences announced that a group led by its management team has made an equity investment in the company that gives it a 22 percent stake in the company. The group includes key members of Agrisoma’s senior management, board members and advisors.

Resonance Carinata, the company’s lead product, is the world’s only RSB-certified (Roundtable on Sustainable Biomaterials) sustainable oilseed crop, providing a source of sustainable oil for renewable fuels and other products, in addition to a high-protein animal feed by-product.

In September 2014, Agrisoma closed an $8 million Series A financing round, which was led by Cycle Capital Management, a clean tech venture capital platform of investments, with participation by BDC Venture Capital, one of Agrisoma’s current equity investors.

In a related transaction, Agrisoma has purchased all the shares previously held by Calyx Bioventures, removing Calyx as a shareholder in Agrisoma. The shares, which represented a similar 22% stake, were purchased in the buy-back for $244,465.

Calyx’s investment in Agrisoma had represented approximately 22.82% of the total number of Agrisoma shares outstanding. The consideration was paid in full upon closing.

In early 2014, Calyx waived its pre-emptive rights with respect to financing Agrisoma, and in July 2014, Agrisoma commenced a Series A financing of C$8.0 million dollars led by Cycle Capital Management with participation from BDC Venture Capital. As Calyx reported, “The full completion of the Series A Financing resulted in Calyx’s interest in Agrisoma being reduced from approximately 49.9% to approximately 22.82%. If Calyx were to have retained ownership of its shares of Agrisoma and Agrisoma required additional financing in the future, further dilution of Calyx’s position would have been expected to occur.”

Surmising that the Series A investors acquired 53.6% of the company in the Series A round (hence, Calyx’s dilution to a 22.8% stake), the company would have been valued at  $14.91 million in the Series A round.

Agrisoma President and CEO Steven Fabijanski, who led the group making the investment, said, “This investment underscores the value being created as Agrisoma expands its commercialization of Resonance Carinata. The opportunity for new sustainable, high-performance agricultural seed products such as Resonance Carinata is substantial, and we want to become more invested in its success.”

In other news, Agrisoma increased the acreage for carinata in the US Southeast to 3000 acres, the Digest learned, where it is being successfully marleted as a winter month crop.

Separately, Agrisoma targeted “a minimum of 50,000” acres for 2015, citing recent approvals of carinata meal and carinata-based fuels that will allow the company to move beyond the planting levels for 2012-14, which were generally restricted to testing and product development. The company contracted 6,700 acres in 2012, in Saskatchewan and Alberta. Expansion has awaited the approval for carinata meal.

Crop prices have ranged from $8 to $12.50 per bushel in published reports, and yields are expected to reach 44 bushels per acre, with the intruduction of the company’s AAC A110 line. AAC A110 also resulted in an improved meal profile, with over 40% protein, and readily degradable by rumen bacteria, according to researchers at the University of Saskatchewan.

Referring to the company’s recent growth in the US, Fabijanski said, “We believe that  Carinata provides a very good opportunity for southeastern growers, being able to grow in rotation with major cash crops, hence additional farm income without interruption of the food supply.  The rotation benefits are quite compelling (particularly in Florida)  and this type of production has a good fit with low indirect land use change strategies for the sector.  We are working with the University of Florida, and they have state funding to assist in the commercialization.”