Mycogen Hopes to Raise $20 Million in Stock Sale
Mycogen, a San Diego biotechnology company that manufactures agricultural pesticides, announced plans to sell 2 million shares of its stock in an offering that could raise $20 million for the company.
The stock sale is being held mainly to accommodate Griffin Corp., a Valdosta, Ga.--based concern that in August sold its Soilserv unit to Mycogen for $21 million in stock and cash. Soilserv now provides Mycogen with the bulk of its revenues.
Mycogen executive vice president Andrew Barnes said the stock sale will enable Griffin to liquidate much of the stock it took in exchange for Soilserv, a provider of customized crop protection services, principally to vegetable growers in the Salinas area.
Mycogen is not selling stock because it is in dire need of cash: the company had $77 million in stockholders equity as of Sept. 30, Barnes said. Mycogen’s largest shareholder, Lubrizol, which owned 12% of Mycogen’s shares before the offering, is not selling any stock in the offering.
Of the 2 million shares being sold, about 1,272,000 are new shares issued by the company and the rest are being offered by existing shareholders, including Griffin which is selling 700,000. On Thursday, Mycogen stock closed at $15.25 in over-the-counter trading, down $.50 for the day. The offering will bring the company’s total outstanding shares to 14 million
Mycogen also reported a third-quarter profit of $415,000 on revenue of $7.7 million, versus a loss of $140,000 on revenue of $4 million loss for the same three months last year.
The profit and the increase in revenues are almost entirely attributable to the acquisition of Soilserv, which posted revenue of $20 million for fiscal 1990.
Mycogen acquired Soilserv because the services firm provides it with distribution for its goods and “because they are very experienced at developing practical methods of using pest control product technologies,” Barnes said. “A critical issue for Mycogen is developing practical methods for using our products in the field.”
Mycogen sells five products, two of them two genetically engineered bio-pesticides, including M Trak, the company’s second-generation pesticide for the Colorado potato beetle. Others are concentrated forms of fatty acids used to kill mosses and certain soft-bodied insects.
