Evogene Ltd (EVGN)

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$EVGN this is fun too...

Corteva Investment in Lavie Bio in August 2019 includes Board Appointment
In August 2019, Evogene announced that Corteva was making a substantial investment in Lavie Bio and was appointing a representative on Lavie Bio's board of directors.

The announcement was very significant as Corteva is a leading multinational seed and crop protection company with a $21 billion market cap, spun out of DowDupont last June 2019.

Corteva's investment in Lavie Bio was valued at approximately $27.5 million, including the exchange of all shares of Corteva’s wholly-owned subsidiary Taxon Biosciences along with a US$10 million equity investment by Corteva in consideration of approximately 30% of Lavie Bio’s equity (which ultimately worked out to be approximately 28% of Lavie Bio's equity according to Evogene's Form 20F filed July 27, 2020 with the SEC).

I have assumed that the shares in Taxon Bioscience were valued by the parties at approximately $17.5 million because of the reference in Evogene's Consolidated Statement of Cash Flows for Q3 2019 (3-month period ending September 30, 2019) where the sum of $17,449,000 was attributed to the "Acquisition of intangible assets from non-controlling interests against the issuance of subsidiary's ordinary shares." There are no other acquisitions of intangible assets by any of Evogene's subsidiaries in Q3 2019 in which shares of the subsidiary were issued other than Lavie Bio's acquisition of the shares of Taxon Bioscience from Corteva as announced in August 2019.

The assets of Taxon Biosciences include an IP portfolio, a large microbial collection, and product candidate pipeline, which are now integrated into Lavie Bio’s pipeline, and contributed to Lavie Bio's technological capabilities.

According to Lavie Bio's CEO, after the Taxon Bioscience acquisition from Corteva, it now has a combined collection of 140,000 strains from 4 different continents, which is now one of the largest such databases in the world.

In addition (as set out in Form 20F, filed July 27, 2020), Corteva’s August 2019 investment in Lavie Bio provided Corteva with certain future rights to obtain commercial licenses to Lavie Bio’s candidate products, mainly in corn and soy.

Corteva's 28% equity investment in Lavie Bio was actually an evolutionary step in the Corteva/Evogene relationship which began in July 2017, when Evogene entered into a multiyear collaboration with DuPont Pioneer (now Corteva) for the research and development of novel microbial biostimulant seed treatments for the improvement of corn productivity globally. Under the earlier 2017 multi-year collaboration agreement, Lavie Bio is still entitled to milestone payments for the advancement of candidate strains, and royalties from product sales. The precise financial details of this collaboration deal with Corteva are not disclosed.

Corteva has now appointed its representative, Rowdy Smith, Global Portfolio Leader for the Seed Applied & Biological Technologies for Corteva Agriscience, to Lavie Bio's board of directors.

Assuming that the Corteva investment in Lavie Bio last August 2019 is valued at $27.5 million for Corteva's 28% interest in Lavie Bio, that calculates into a post-transaction valuation of Lavie Bio of approximately $100,000,000 as of August 2019 (which would value Evogene's 72% interest in Lavie Bio at approximately $72 million).

Since then, Lavie Bio has made further progress and arguably is now more valuable.

https://seekingalpha.com/article/4370400-evogene-hidden-gems-of-computational-predictive-biology-part-2-of-4-lavie-bio