Recently, Bayer (BAYRY) announced that it has inked a deal to purchase the privately-held Hornbeck Seed Company Inc., a reputed seed supplier.

Through this deal, whose financial terms were not disclosed, Germany-based Bayer will gain access to the seed businesses of the private entity. The purchase will also give Bayer access to high yielding soybean varieties. Hornbeck Seed Company supplies seeds of the highest quality to customers across Alabama, Arkansas, Georgia, Louisiana, Mississippi and Texas.

The deal, signed by the Crop Science segment at Bayer, will bolster Bayer’s position as a provider of value-added seeds. The Crop Science segment is one of the world’s leading crop-science players in the areas of crop protection, non agricultural pest-control, seeds and plant biotechnology.

The acquisition of Hornbeck Seed Company will enhance Bayer’s expertise in the fields of soybean breeding and licensing coupled with the production of soybean, rice and wheat seeds.

We believe that the acquisition will strengthen Bayer’s top line significantly since soybean is globally the most important oilseed crop with US being one of the premiere producers. The other top producers of the crop are Brazil, Argentina, China and India.

We note that the Crop Science segment at Bayer is leaving no stone unturned to improve its offerings and services. In December 2010, the Crop Science segment of Bayer inked a five-year deal with the privately held biotechnology company Evogene Ltd to improve wheat seeds.

The deal focuses on improvements regarding wheat yield, tolerance against drought, efficiencies pertaining to the use of fertilizers in addition to utilizing advanced methods for breeding and genetic modification.

Even though the expansion efforts at Bayer are very encouraging, we believe investor focus going forward will remain on the US approval of Bayer’s blood-thinner Xarelto, which has been co-developed with Johnson & Johnson (JNJ).

 

 

 

 
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