SOURCE: AgraQuest


March 03, 2010 16:12 ET

AgraQuest Inc. Strengthens Financial Standing Ahead of Planned IPO

DAVIS, CA--(Marketwire - March 3, 2010) -  AgraQuest Inc. today announced that it has significantly strengthened its financial standing by closing a transaction resulting in the conversion by Loudwater Trust Limited of its note with an original face value of $10 million, plus certain accrued interest, into AgraQuest preferred stock. Separately, AgraQuest announced that it has obtained a line of credit from Silicon Valley Bank to support working capital growth.

Loudwater, a UK-based, AIM-listed investor that focuses on pre-IPO and late-stage growth opportunities, elected to negotiate the conversion with AgraQuest into preferred stock. Loudwater's initial investments in AgraQuest, in the form of a convertible note and a separate preferred equity investment, came in November of 2007, when they joined a consortium of investors including TPG Growth, Otter Capital, Emerald Ventures, Halcyon Capital, Foragen and SwissRE in providing additional growth capital to AgraQuest. The conversion of this debt will enable AgraQuest to further finance growth, commercialize additional products in its pipeline, and increase its market share of the emerging low chemical ag-inputs sector. Edward Forwood of Loudwater has joined AgraQuest's board of directors.

"In assessing AgraQuest's long-term growth and value appreciation potential -- its strong current portfolio and pipeline of unique, proprietary products, its recent partnership announcements with major chemical companies such as BASF, and the myriad macro drivers such as increasing population, growing scarcity of arable land and water, tightening regulatory restrictions on synthetic chemistries, and increasing need for effective products with improved environmental and worker safety profiles -- we determined that conversion into an equity position at this time was much more advantageous to Loudwater as investors," said Forwood. "We believe that AgraQuest is creating substantial value as the technological and commercial leader of the emerging low chemical ag-inputs sector. With an increased equity position, we anticipate that Loudwater is now positioned for maximum benefit."

AgraQuest, an innovative leader in the biopesticide and low-chemical agriculture sectors is tentatively planning an initial public offering in 2011.

"We are very pleased that Loudwater pursued this debt conversion arrangement," said AgraQuest CEO Marcus Meadows-Smith. "It further validates that our investors are excited about the direction, financial performance and technical and commercial progress of AgraQuest. The addition of Edward Forwood to our board of directors is a very positive step in strengthening the long-term ties between AgraQuest and Loudwater. Ultimately, this transaction helps solidify AgraQuest as the leader of the low chemical ag-inputs market."

About AgraQuest Inc.

AgraQuest is a biotechnology company that focuses on discovering, manufacturing and marketing highly effective pest management products for agricultural, institutional and home markets. The company holds a large portfolio of its own proprietary products, as well as actively in-licensing technology that fits into its low chem portfolio. As a leader in the emerging low chem sector, AgraQuest works to provide growers with solutions that offer best-in-class control while reducing the chemical load on the environment. The Agrochemical division of AgraQuest offers a global portfolio of products -- recognized as safer to beneficials, workers, and the environment -- that includes SERENADE®, SERENADE® Garden, RHAPSODY®, SONATA®, and BALLAD® PLUS fungicides and BARITONE® and REQUIEM® insecticides. AgraQuest's BioInnovations division provides the company an avenue to take biological and low-chemical technology created for the agriculture industry and find innovative uses for it in related markets. The BioInnovations division identifies both appropriate market segments and opportunities for AgraQuest's intellectual property, while seeking industry leaders in ancillary markets to partner in the commercialization and distribution process. AgraQuest has received several environmental awards including the Presidential Green Chemistry Award from the U.S. EPA for the discovery and commercialization of SERENADE. It also received the prestigious Global Frost & Sullivan Growth Leadership Award in 2009 for the biopesticides market. For more information visit