Evogene raises $74m in New York

Monsanto invested $12 million in Evogene as part of the offering.

Evogene Ltd. (NYSE: EVGN; TASE:EVGN) completed its offering on the New York Stock Exchange on Wednesday. The company raised a gross $74 million at $14.75 per share, 12% below the market price. The offering reflects a company value of $355 million.

Since Evogene announced its plans for the offering six months ago, its share price has risen 31%, through Wednesday morning.

Credit Suisse Securities and Deutsche Bank Securities are the joint book-running managers for the offering, and Oppenheimer & Co. and Piper Jaffray & Co. are co-managers. If the underwriters exercise their over-allotment options in full, Evogene will gross an additional $11 million. Seed giant Monsanto Company (NYSE: MON) invested in the offering, buying shares for $12 million. It now owns 9.87% of Evogene.

Monsanto's investment in Evogene's offering is part of the two companies' expanded collaboration, announced a few weeks ago. The market viewed the expanded collaboration as ratification of Monsanto's support for Evogene, and its satisfaction at the progress of the products being jointly developed. This support unquestionably helped the offering.

What will Evogene do with $74 million? To date, the company has kept its cash burn rate at a fairly low level, because most of its agreements with seed companies, agreements which are its main business, include full or partial financing of development costs. In the prospectus filed with the US Securities and Exchange Commission (SEC), Evogene said that it would invest the resources in speeding up time to market for its products. Currently, this process can take up to ten years from the start of an agreement with a seed company.

Evogene also plans to invest in the independent development of certain products, which it might be able to commercialize at later stages at better contractual terms. It will also invest part of the proceeds in additional technology infrastructures.

According to the prospectus, half of the net proceeds will be invested in Evogene's independent biofuels and ag-chem (biological pesticides and fertilizers) activity.

Published by Globes [online], Israel business news - www.globes-online.com - on November 21, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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