Boston-based Ginkgo Bioworks Holdings Inc. has agreed to pay $83 million to acquire Bayer’s 175,000-square-foot West Sacramento biologics research and development site, along with its employees there and discovery technology platforms.
Ginkgo (NYSE: DNA) will also integrate the research and development platform from Joyn Bio, a joint venture of Bayer and Ginkgo, launched with a $100 million investment five years ago.
"By acquiring one of the premier R&D sites for agricultural biologicals worldwide and partnering with the best-in-class teams at Bayer and Joyn, we are demonstrating our commitment to developing breakthrough products for growers around the world," said Ginkgo CEO Jason Kelly, in a news release. "To ensure sustainable food security for an ever-growing population, we need to invest in biological solutions."
Ginkgo said that while chemical and plant trait products are the current dominant offerings on the market to improve crop performance, "agricultural biologicals are a rapidly growing category of solutions that have the potential to offer tremendous sustainability and performance benefits."
Joyn Bio started in 2017 to develop microbes that colonize plants and help them absorb nitrogen. Nitrogen is currently used by farmers to promote plant growth, but it is expensive and often over-applied, creating environmental hazards as it runs off into watersheds.
Ginkgo representatives weren't available to comment on whether the Joyn Bio team that is currently in Woodland in a sequestered area in Bayer’s seed research center will move to West Sacramento, or to comment on how many Bayer employees are involved in the transfer.
The transaction is expected to close by the end of the year.
Ginkgo said Bayer will be the first major partner of its expanded agricultural biologicals platform, both for its nitrogen-fixing technologies as well as for new programs in crop protection and carbon sequestration.
Ginkgo said that as part of a three-year strategic partnership, Ginkgo will provide research services to Bayer in the field of agricultural biologicals with the potential to earn royalties on net sales from products developed under the partnership.
Ginkgo said cash proceeds from this collaboration with Bayer will “significantly offset the operating expenses acquired through the transaction."
In addition to this collaboration with Bayer, Ginkgo expects to engage with other customers in development of agricultural biological programs.
Separately, Ginkgo today said it would buy Emeryville-based competitor Zymergen Inc. in an all-stock transaction valuing Zymergen (Nasdaq: ZY) at $300 million.
