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Plant tech company Benson Hill listed on $ 2 billion SPAC merger

Benson Hill will merge with a special acquisition company to list a plant-growing technology company in a $ 2 billion deal, the two companies said.

Benson Hill, the operator of a platform that uses machine learning, simulation, and genetics to optimize plant growth, is paired with SPAC Starpeak Corporation II...

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Benson Hill states that it can develop varieties of crops that mature faster, have higher protein content, taste better, and save producers time and resources, such as soybeans and yellowpeace.

These ingredients are the key to plant-based meat substitutes, and the company is also developing products for animal feed. According to analysts, cheaper and more sustainable plant growing methods are needed to feed the world’s growing population and accelerate the fight against climate change.

The St. Louis-based company plans to start commercial production of ultra-high protein soybeans by next year and is developing a yellow pea protein concentrate. There are also units that sell fresh food to grocery stores and food distributors. In an interview, Matt Crisp, CEO, said the estimated $ 625 million in cash revenue from the deal would accelerate Benson Hill’s bid to reduce plant-based food costs.

“It really puts us in a gear shift to another level of growth,” he said.

Founded in 2012, Benson Hill expects last year’s sales to skyrocket to about $ 100 million as it offers more products to food companies, restaurants and grocery stores.

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The company’s existing investors include Alphabet’s venture capital arm, GV. Co., Ltd.

— And the agricultural trade giant Banji Co., Ltd.

Louis Drefs Investors, Including Funds Managed by BlackRock Co., Ltd.

Van Eck Associates Corp., Hedosophia, and Lazard Asset Management have funded the transaction through a $ 225 million private investment in public equity (PIPE) associated with the merger. These funds and funds held by SPAC are expected to generate approximately $ 625 million in cash revenue.

Benson Hill has joined a group of early-stage sustainability-related companies, such as vertical farming company Aero Farms, to raise and publish through SPACs.

“If you are serious about decarbonizing your economy, you need to decarbonize it. [agriculture]”Mike Morgan, Chairman of Star Peak Corporation II SPAC and Chief Executive Officer of Triangle Peak Partners LP, an asset management company, said.

Starpeak II is the second blank-checking company backed by Morgan, a former executive of energy infrastructure company Kinder Morgan. Co., Ltd.

— And an investor in hedge fund Magnetar Capital.The team’s first Starpeak SPAC recently acquired Stem, a clean energy storage company. Co., Ltd.

public.

Magnetar was one of SPAC’s largest investors, with nearly $ 2.9 billion in blank-checking companies as of the end of 2020, according to a compilation of regulatory filings by data provider SPAC Research.

Private companies are flooding with special purpose acquisition companies (SPACs) to bypass traditional IPO processes and go public. The WSJ explains why some critics say investing in these so-called blank-checking companies is not worth the risk. Illustration: Zoë Soriano / WSJ (issued September 30, 2020)

SPACs like StarPeak II are exchange-listed paper companies to acquire and publish private companies. They are also called blank check companies. The merger with SPAC has become a common way for startups to raise large sums of money and access investors who are excited about themes such as sustainability. One of the reasons is that the merger of SPACs allows startups to make rosy forecasts about their business. This is not allowed in a normal initial public offering.

SPAC executives claim they are accelerating the growth of technology-driven businesses that could ultimately change the world. Skeptics argue that some low-margin companies listed through blank-checking companies are not ready to do so and could cost retail investors if their technology fails. ing. Concerns over tightening regulations and high valuations have reduced the shares of SPACs and their public companies in recent weeks.

So far this year, SPAC has raised more than $ 100 billion, surpassing a record $ 80 billion in 2020, according to SPAC Research.

After closing the deal later this year, Benson Hill will be traded under the ticker symbol “BHIL”.

Write to Amrith Ramkumar at amrith.ramkumar@wsj.com

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Plant tech company Benson Hill listed on $ 2 billion SPAC merger

Source link Plant tech company Benson Hill listed on $ 2 billion SPAC merger

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