Origin Agritech Reviews Agriscience M&A, Goals Following $60 Million Divestment

Benzinga recently had the chance to speak with Origin Agritech Ltd. SEED CEO Bill Niebur and chief financial officer Shashank Aurora about Origin’s plans for the $60 million the company received for its commercial seed business, diversity among the company’s leadership and the booming M&A environment in the seed business.

According to Niebur, the combination of American, Indian and Chinese leadership at the company has brought global perspective and global experience to Origin.

“We feel like we’ve assembled diversity in the sense of where we’ve come from and where we’ve developed, but also who we’ve worked with, but we have a common understanding of what it’s like to operate at the highest levels of science and the highest levels of business and transparency and ethical behavior within the company,” Niebur explained.

Putting $60 Million Divestment To Work

When Benzinga asked how the company planned to put its newly-raised $60 million to work, Aurora said most of it will go to paying down debt.

“So we will retire some of the debt that will then clean up the balance sheet, make it a little stronger, and with the sliver of cash that is leftover have a longer term strategy to make our technology space in China, both traditional and the biotech, and also to fund a little bit of growth in the North American space,” Aurora told Benzinga.

Consolidations And Emerging Markets

Nieber said he believes consolidation in the agriscience space will continue, but he sees a shift more toward technology as the primary focus.

“We think that this current round of consolidation will go forward, but at the same time, new relationships and new forms of relationships will strike up, whether it would be strategic investments or equity positions or technology exchanges,” Nieber said.

While much of the focus in the sector has been on developed markets, Origin hasn’t neglected the long-term growth opportunities that emerging markets provide.

“What we have done is that we’ve tried to position ourselves in a way to develop novel routes to market in some of these novel, emerging, fast-growth markets, albeit from a small base, but fast growth nonetheless,” Nieber told Benzinga.

Origin shares are already up 74.8 percent in 2016, and the company's renewed focus on engaging with Wall Street will likely bring more investors to the table in the future. In the past six months, Origin has engaged an IR firm and a PR firm to help get the word out about the company’s accomplishments and agenda.