Starpharma Holdings (ASX: SPL) has completed a transaction to sell its agrochemicals and Priostar® business (Starpharma Agrochemicals) to Agrium, Inc. (NYSE: AGU, TSE: AGU) for A$35 million in cash consideration.
The Starpharma Agrochemical business will be operated by Agrium’s wholly-owned subsidiary, Loveland Products, Inc.
Starpharma Agrochemicals is comprised of key patents and technical know-how as well as a small number of staff dedicated solely to Priostar® dendrimers and agrochemicals operations. This business is independent of Starpharma’s DEP® and VivaGel® products and related intellectual property portfolios.
The cash proceeds from the sale of the Agrochemicals business have further strengthened the company’s balance sheet and will allow Starpharma to focus its resources and activities on its core pharmaceutical development portfolios, including DEP® drug delivery.
Starpharma intends to use the funds to accelerate the development and commercialisation of its highervalue pharmaceutical dendrimer-based products and to explore other opportunities in this area of the business.
With the net proceeds from the transaction, the company estimates a cash balance of greater than $60 million at 30 June 2017.
Commenting on the transaction, Starpharma Chief Executive Officer, Dr Jackie Fairley said:
“The sale of Starpharma Agrochemicals is an exciting milestone for the company and the culmination of our strategy to maximise the value of the Priostar® technology. We achieved this outcome through the development of a range of value-added formulations utilising Priostar® to a stage where those products had high attraction value as differentiated products for a market-facing third party such as Agrium. It’s a very pleasing outcome, Agrium is an ideal buyer to realise the full potential of Priostar®”.
“The proceeds from the sale of Starpharma Agrochemicals places Starpharma in an excellent financial position to expand and accelerate the development of its internal DEP® programs, and increase shareholder value through its pharmaceutical portfolio.”
The transaction involves the sale of Starpharma’s wholly-owned US subsidiary, Dendritic Nanotechnologies, Inc., and a newly created Australian subsidiary containing all Priostar® and agrochemical intellectual property and business assets.
The sale of Starpharma’s Agrochemicals business to Agrium follows a global process conducted by the company and its financial adviser, Macquarie Capital (Australia) Limited.