Danish biotech firm to buy Philom Bios

Saskatoon crop inoculant maker Philom Bios recommended Wednesday that its shareholders accept a $25.6 million all-cash takeover bid by Novozymes A/S, a major player in the enzyme and microorganism business.

Novozymes, based in Denmark, markets over 700 products in 130 countries for use in industrial and food production. The company has signed a “pre-acquisition agreement” with Philom Bios toward a cash deal worth $6.50 per Philom Bios share.

Philom Bios announced Wednesday that “certain shareholders” and all its directors and officers have already signed into lock-up agreements to tender all their common shares, a stake worth over 70 per cent of the company.

The Saskatoon company makes the inoculant JumpStart, to improve uptake of soil and fertilizer phosphate; TagTeam, to improve phosphate use and nitrogen fixation; and N-Prove, a nitrogen inoculant. It had a marketing deal with Agrotain for that company’s Stabilized Nitrogen products, but ended that deal last December.

Philom Bios is also no stranger to takeover bids, having first fought and then accepted proposals from inoculant rival MicroBio Rhizogen, owned by U.S. firm Becker Underwood, in 2001. That deal was never closed, however, reportedly because the buyer couldn’t wait for a long, unrelated legal battle between Philom Bios and Dow AgroSciences Canada to conclude.

The court case in question, a dispute over expired inoculant inventory stemming from the two companies’ previous marketing deal, dates back to 1997 and ended in July 2005 when Philom Bios was ordered to pay Dow Agro over $944,000, plus court costs and interest worth about $375,000.

An Alberta appeals court ruling in April 2007 lowered that amount — allowing Philom Bios to recover over $700,000 — but upheld the judgment against Philom Bios.

Philom Bios announced in June that Dow Agro would seek leave to appeal the Alberta decision to the Supreme Court of Canada.

(Correction, Nov. 30, 2007: An earlier version of this article indicated Philom Bios, not Dow, planned to seek leave to appeal to the Supreme Court. Agcanada.com regrets the error.)