FMC Expands Biological Portfolio with Acquisition of Pheromone Company
For a reported purchase price of $200 million, FMC will acquire BioPhero. The acquisition includes technology, IP, supply agreements and employees of the Denmark-based company which has focused on biologically produced pheromone technology for insect control.
“This transaction significantly expands FMC biological segments with BioPhero’s game-changing patented synthetic biology technology, which is substantially lower in cost compared to competitive technologies and is a platform for large scale production of pheromone crop protection products. We expect pheromone based insect control products to generate approximately $1 billion in FMC revenue at above average EBITDA margins by 2030,” says Mark Douglas, FMC president and chief executive officer.
Douglas says the lower cost of production “significantly drove the acquisition,” and will unlock the potential to greatly expand the use of pheromones beyond its current footprint of specialty crops to include row crops.
“Vegetables, vines and nuts make up approximately 80% of the total market size,” he says.
FMC cites the current pheromone sales market size of $500 million across up to 7.5 million acres, but they forecast the market size to become multi-billion dollars and applied to more than 250 million acres.
As Douglas explains, pheromones provide new controls of insects with new modes of action that can be layered with traditional crop protection products.
“Pheromones can be sprayed in a field to disrupt the insect mating process, and hence results in significantly lower subsequent generations of target insect larvae, which would otherwise damage crops,” he says. “We don't consider this cannibalistic at all to our current business. In fact, we see this as a method of expanding our market share for insecticides. We have roughly just over $3 billion dollars of insecticides in an $18 billion market. And with these types of products running these types of management programs, we expect to take further share, so the 1 billion dollars we're talking about from pheromone-based products is totally additive to everything else we've talked about in the past.”
First commercial sales of the pheromone products will be launched as early as 2024. BioPhero has five products in its pipeline with launch dates in the next five years.
Earlier in June FMC introduced Biologicals by FMC , its brand serving this market segment, and it’s the group BioPhero will be integrated into.
The companies were first introduced in 2019, and FMC made an investment in the company in 2021 before announcing this full acquisition.
Douglas says a majority of the current BioPhero team members are PhDs focused on research and development, which will help accelerate product development.
And he shares FMC is eager to pursue additional M&A activities.
“You should expect to see us do more of this is the type of acquisition,” he says.