US – Benson Hill, a food tech company unlocking the natural genetic diversity of plants, has decided to focus on global opportunities across its Ingredients Segment, which is expected to generate revenues of between US$370 million to US$390 million in fiscal 2022.
The new area of interest has been agreed upon after the company decided to sell the assets and equity related to its Fresh business.
The divestiture is happening in a two-part transaction for an aggregate purchase price of US$21 million, approximately US$18 million of which was realized in gross cash proceeds in 2022, with the balance of the transaction expected to close in the second quarter of 2023.
The sale enables the company to enhance its focus on its ingredients business and meet the growing demand for its proprietary soybean product portfolio.
On December 2022, Benson Hill closed on the first part of the transaction, which included the sale of the Vero Beach, Fla., facility, real estate, and packhouse to IMG Enterprises, a diversified agribusiness in Groveland, Fla., for a purchase price of US$18 million, subject to customary adjustments.
The company’s remaining Fresh business is anticipated to be divested to IMG Enterprises during the second quarter of 2023 for a purchase price of US$3 million under a stock purchase agreement, subject to certain adjustments and customary closing conditions.
Benson Hill Chief Financial Officer Dean Freeman said: “We’re pleased to bring this process to a successful close. We believe there is a tremendous opportunity to grow our proprietary ingredients portfolio in the food, oil, and aquaculture markets.”
“Selling the Fresh business enhances our focus and further enables disciplined capital allocation in support of our strategic growth objectives.”
The proceeds from the divestiture will be used to supplement Benson Hill’s plans to fully fund its ingredients business, inclusive of debt repayments, and execute its previously announced strategic initiatives.
The company added that it will record the Fresh Segment as discontinued operations, and following the closing of the second transaction expects to record an approximate 50% non-cash write-off of the book value of the business.
Over the past nearly two years, Benson Hill has taken steps to strengthen its Ingredients business, beginning with the July 2021 hiring of longtime ADM executive Bruce Bennett to lead its Ingredients business segment.
In January 2022, the company acquired ZFS Creston, LLC, an established food-grade white flake and soy flour manufacturing operation in southwest Iowa for approximately $102 million, a step in its ability to convert the proprietary soybeans into value-added soy protein ingredients for the underserved human and pet food categories.
A month later, Benson Hill launched TruVail, a line of domestically sourced non-GMO, plant-based protein ingredients, sourced from its proprietary ultra-high protein soybeans.
In November 2022, the company also unveiled US$28 million investment plans to expand in Creston, Iowa, US, a few months after entering a long-term strategic partnership with ADM.
The expansion will include an additional 15,000-square-foot building and the purchase of equipment to create an extrusion facility to spur product innovation and increase manufacturing scale.
The resulting high-protein soy ingredients will be marketed to consumer-packaged goods companies to help meet the booming demand for plant-based proteins and savory, sweet, and dairy customer needs.
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