Calyxt Inc., a Roseville-based biotech company that makes genetically engineered plant-based products for food makers and other industries, will merge with a San Diego, Calif. firm.
The Minnesota public company announced the all-stock deal Tuesday with Cibus Global, which focuses on gene editing in agriculture. As part of the deal, the new company will be based in San Diego, where Cibus’ current headquarters are based.
Calyxt (NASDAQ: CLXT) intends to issue shares of its common stock to Cibus’ shareholders for the deal, leaving 5% of the combined company under Calyxt shareholder ownership.
Cibus’ current CEO and chairman, Rory Riggs, will take on the same leadership roles in the newly combined company, called Cibus Inc.
Calyxt had announced in September that it was considering strategic options, like a merger or an asset sale, the Business Journal reported. The company saw significant declines in revenue in 2022, which the company attributed to the winding down of its soybean product line, according to a securities filing.
Founded in 2010, Calyxt's technology can develop targeted compounds for food, cosmeceutical, nutraceutical and pharmaceutical markets.
With the deal, Calyxt’s current offices, laboratories and breeding facilities in Roseville will retain operations, the announcement said. When asked about the future of Calyxt's executive team, including current CEO and President Michael Carr, a Cibus spokesperson said the team will remain on as an interim management team, supporting the transition until the merger's close. Regarding whether layoffs are expected, the spokesperson said integration plans are being developed.
"Cibus is an excellent strategic fit for Calyxt given our complementary technology platforms, and the merger provides a great opportunity to leverage multiple synergies to drive innovation and shareholder value," Carr said in a statement.
The combined company, which will be publicly traded on NASDAQ, will focus on two applications in agriculture-based gene editing, which includes developing new productivity traits in seeds and new sustainable, low-carbon ingredients, the companies say.
The merger is expected to close in the second quarter of 2023, subject to closing conditions.
Canaccord Genuity was the financial adviser for Calyxt while Sidley Austin served as its legal counsel. Jones Day served as legal counsel to Cibus on the deal.
Calyxt was ranked No. 3 on the Minneapolis/ St. Paul Business Journal’s 2022 Fastest-growing Public Companies list, with a 256% revenue growth rate. But in its latest quarterly filing, the company posted just $115,000 in revenue for the first nine months of 2022, compared to $24 million the previous year.
Shares of Calyxt had declined from $2.06 a year ago to less than 20 cents last week. On Tuesday following the announcement, shares went up 167%, to $0.48.
