Intrexon To Acquire Trans Ova Genetics
Intrexon Corporation (NYSE: XON), a leader in synthetic biology, today announced it has entered into a definitive agreement to acquire Trans Ova Genetics, L.C., an industry-leading provider of bovine reproductive technologies. Trans Ova's dedication and strong commitment to its customers, which has sustained its outstanding reputation within its industry, will continue unabated. Trans Ova will become a wholly owned subsidiary of Intrexon under the leadership of David Faber, D.V.M., President, and his current management team.
Over the past 5 years, Trans Ova has doubled its revenues and become the largest producer and supplier of bovine embryos in the United States. Intrexon and Trans Ova intend to build upon Trans Ova's current platform with new capabilities to allow for even higher levels of delivered value to dairy and beef cattle producers. Both companies share a common goal to develop safe, cost-effective and sustainable solutions for growing worldwide food needs, and this transaction strengthens their ability to achieve that objective with a keen focus on global expansion.
According to the Food and Agricultural Organization of the United Nations (FAO), global demand for animal protein will double by 2040 driven by population growth and changing consumption patterns. FAO estimates that in 2010 the worldwide production value of cow milk was $180 billion and for indigenous cattle meat it was $172 billion. From those 2010 levels FAO projects global consumption of beef and dairy products will increase 158 percent by 2050, based on population expansion above 9 billion people.
"Intrexon's mission is consistent with our own as we have sought to enable efficient, high-quality food production that supports the necessities of a growing global population in a sustainable way," said Dr. Faber. "We believe our advanced bovine reproductive technologies, including embryo transfer and in vitro fertilization, integrated with Intrexon's capabilities, are well-suited to provide multiple solutions for further advancing food animal genetics."
Thomas R. Kasser, Ph.D., Senior Vice President and Head of Intrexon's Food Sector, spoke of the integration of these technology platforms. "Trans Ova's commitment to advancing superior bovine genetics sets the mark for excellence in animal breeding. We believe the combined power of our technologies creates a valuable asset in moving the science forward in bovine improvement and enabling globalization of animal genetics. With the additional utilization of OvaXon's animal fertility platform, we aim to expand our food animal applications to provide innovative solutions to address global food supply needs."
The acquisition of Trans Ova will also broaden Intrexon's reach in animal health and productivity. In December 2013, Intrexon and OvaScience (NASDAQ: OVAS), a life sciences company focused on the discovery, development and commercialization of new treatments for infertility, established a joint venture called OvaXon to create new applications for reproductive technologies to improve human and animal health. In connection with the proposed transaction, OvaXon which is developing applications to advance animal breeding, will license its technology to Trans Ova.
Arthur Tzianabos, Ph.D., Program Manager of OvaXon and Chief Scientific Officer of OvaScience, commented, "There is a natural synergy between Trans Ova's industry-leading bovine reproductive capabilities, our pioneering fertility technologies, and Intrexon's biological engineering tools and expertise. Together these platforms have the potential to enable the next-generation of reproductive technologies for food animals."
Pursuant to the definitive agreement between Intrexon and Trans Ova, Trans Ova stockholders will receive approximately $60 million in upfront cash, $30 million in Intrexon common stock, and deferred payments of up to $20 million. Trans Ova generated revenues of $63.3 million and net income of $4.87 million in FY2013. Consummation of the transaction, anticipated in the 3rd quarter, is subject to customary closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
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