Seed giant Monsanto has closed the acquisition of Israel's Rosetta Green,which makes engineered seeds for farmers. Moreover, Monsanto has agreed to pay $35 million for Rosetta, which is roughly double the company's market value.
- Technicolor fruit varieties to help Israeli farmers corner world markets
- Israel, U.S. pledge to expand agricultural cooperation in Africa
Monsanto is pursuing the deal through A.B. Seeds, a fully owned subsidiary.
The deal does not include Rosetta's $1.8 million cash or future liabilities due to layoffs.
Following the deal Rosetta Green will become a stock market shell with $37 million cash.
Investors applauded the news, sending Rosetta stock up 22.3 percent on the Tel Aviv Stock Exchange. But perhaps news had been out there: the stock rose more than 80% in two months.
Rosetta Green locates and develops unique plant genes in order to develop seed strains for crops suitable as biofuels and food.
The backers behind Rosetta have generally done beautifully from the takeover. Its main shareholders are Plan B, which is a partnership between Barbara Goldman and Mark Gelfand, who hold 40% of the company. Alex Rabinowitz holds 28.4% of the shares.
Plan B and Rabinowitz, one of the controlling shareholders in the biotech company XTL, have done well. In December 2011 they took advantage of the financial distress of the mother company, Rosetta Genomics, and purchased 50.03% of Rosetta Green shares from it for a mere $900,000.
Another beneficiary from the deal is Rosetta CEO, Amir Avniel, who got 794,000 stock options theoretically worth NIS 4.9 million in profit.