Croda Europe, a wholly-owned subsidiary of Croda, has agreed to buy crop enhancement developer Plant Impact for around £10m.
Under the terms of the offer, Croda will pay 10.57p in cash for each Plant Impact share, which represents a premium of around 79.9% to the closing price on Thursday. The consideration will be funded from Croda Europe's existing cash resources.
Plant Impact researches and develops crop enhancement chemistry to improve crop yield and quality. Its head office and research facility are in the UK, but it also has important regional commercial operations in Brazil, the USA, Argentina and West Africa.
Croda said the acquisition will extend its existing life sciences capabilities, adding an experienced commercial team and scientists and expanding its range of intellectual property and products to its existing customer base.
Croda chief executive Steve Foots said: "I'm delighted to be announcing Croda Europe's intention to purchase Plant Impact. This is high quality, novel technology that further expands our position in the crop care sector, and supports our strategy of investing in high growth markets and world leading technologies. Plant Impact has assembled a great team, and we're really excited by the prospect of working with them to accelerate development of this business."
Plant Impact chairman David Jones said: "Following the announcement by Plant Impact on 13 December 2017 regarding the 2018 revenue shortfall and the severe challenge this poses to the company, the board has reviewed its strategic options in parallel with conducting a wide ranging formal sale process. The board has concluded that the best interests of the shareholders are served by selling the company now whilst it remains able to support its trading activities from its remaining cash reserves.
"Furthermore the board believes that Croda's plan for Plant Impact and Croda's current expertise and market position in agricultural chemistry is a firm basis for Plant Impact to fulfil the promise that we have consistently described for it and will therefore provide a more secure future for employees and other stakeholders in the Plant Impact Group."
At 0850 GMT, Plant Impact shares
were up 70% to 10p.