UK specialty chemicals company Croda has made a cash offer to buy crop-enhance specialist Plant Impact for about £10 million.

Plant Impact’s board has unanimously recommended the offer of 10.57 pence in cash for each ordinary share, representing a premium of 79.9% to the closing price on Feb. 15. The acquisition is expected to complete on Mar. 28, subject to shareholder agreement.

Croda said the acquisition will extend its life sciences capabilities and expand its range of intellectual property and products. Headquartered in Rothamsted, Hertfordshire in the UK, Plant Impact also has operations in the US, Brazil, Argentina and West Africa. The company has around 60 staff and commercial sales in more than 14 countries. 

Commenting on the deal, Croda International’s CEO, Steve Foots, said: “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 had started a formal sales process in December 2017 when it ran into financial difficulties. This occurred after Bayer CropScience said it could not comply with offtake commitments of the company’s flagship product Veritas, which is used to enhance soybean yields in Brazil, and would also have to delay a new agreement because of challenging market conditions in the country.

As a result of Bayer’s decision, Plant Impact slashed its revenue forecast for the current financial year from £13 million to about £6 million, while also highlighting the need for a cash injection.

"Following the announcement by Plant Impact on Dec. 13, 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,” said David Jones, Plant Impact’s chairman.