Landec Corp. said Monday it signed two agreements with Monsanto potentially valued at more than $70 million.
Landec sold its direct marketing and sales seed business, Fielder’s Choice Direct (FCD), to American Seeds Inc. (ASI), a wholly owned subsidiary of Monsanto, for $50 million in cash, with a potential additional earn-out of up to $5 million based on FCD results for the twelve months ended May 31, 2007.
In a second agreement, Landec entered into a five-year co-exclusive technology license and polymer supply agreement with Monsanto for the use of Landec’s Intellicoat polymer seed coating technology.
In addition, Monsanto will provide research and development funding over the term of the agreement. This agreement provides for a fee payable to Landec of $4 million if Monsanto elects to terminate the agreement or a fee payable to Landec of $8 million if Monsanto elects to buy out the technology.
If the agreement is eventually terminated Landec will receive minimum guaranteed payments of $17 million for license fees and polymer supply payments over five years or $21 million in maximum payments if Monsanto elects to buy the licensed technology.