ST. LOUIS - Benson Hill, Inc., a company specializing in food and kindred products, has terminated its exclusive agreement with Archer-Daniels-Midland Company (NYSE:ADM) and entered into a new non-exclusive seed supply arrangement. The new contract, effective September 17, 2024, was announced on Thursday, allowing Benson Hill to potentially commercialize and sell certain proprietary high-protein soybean seed varieties.
The new agreement with ADM, a major player in the agricultural industry, enables Benson Hill Holdings, a wholly-owned subsidiary of Benson Hill, to work with soybean growers in the United States. The collaboration aims to source and supply grain grown from these high-protein varieties for ADM's processing into ingredients for human and pet food markets globally.
Under the terms of the new agreement, which replaces the previous exclusive collaboration and marketing rights agreement, Benson Hill Holdings will receive processing fees for soy protein ingredients processed by ADM from the high-protein grain. Additionally, the company will earn proceeds from the sale of seeds of its high-protein varieties to third-party growers who contract to produce the grain.
This strategic shift in Benson Hill's business relationships reflects its ongoing efforts to expand its market reach and diversify its partnerships within the agricultural sector. The information regarding this change in business strategy was based on a press release statement and is not intended to be filed for purposes of the Securities Exchange Act of 1934 or incorporated by reference in any filing under the Securities Act of 1933.
In other recent news, St. Louis-based food company Benson Hill, Inc. has been exploring strategic alternatives, including a potential sale. This follows a preliminary indication of interest from Argonautic Ventures Master SPC and other co-investors. The board of directors at Benson Hill has formed a special committee to review these alternatives, executing a non-binding letter of intent with Argonautic, outlining the terms of a possible acquisition.
In parallel, Benson Hill has undertaken a strategic measure by executing a reverse stock split at a 1-for-35 ratio. This move, ratified by shareholders, is designed to comply with the New York Stock Exchange's minimum price criteria. Consequently, the total number of outstanding shares will be reduced from approximately 213 million to around 6 million, while the relative voting power of stockholders and the company's business operations remain unchanged.
The reverse stock split won't alter the number of authorized shares, the terms of the common stock, or the relative voting power of stockholders. Shareholders will not receive fractional shares but will be compensated in cash for the fractional share value. The number of shares issuable upon exercise or vesting of outstanding equity awards, options, and warrants will also be adjusted equitably.
InvestingPro Insights
As Benson Hill (BHIL) embarks on this new non-exclusive seed supply arrangement with ADM, it's crucial to consider the company's financial position and market performance. According to InvestingPro data, Benson Hill has shown significant revenue growth, with a 55.33% increase in the last twelve months as of Q2 2024, reaching $456.09 million. This growth aligns with the company's strategic move to potentially expand its market reach through the new agreement.
However, investors should note that Benson Hill operates with some financial challenges. InvestingPro Tips highlight that the company is quickly burning through cash and may have trouble making interest payments on its debt. This context is important when considering the potential impact of the new agreement on the company's financial health.
Despite these challenges, the market seems to be responding positively to recent developments. InvestingPro data shows a strong return of 15.74% over the last month and 18.52% over the last three months. This could indicate that investors are optimistic about the company's new strategic direction.
For those interested in a deeper analysis, InvestingPro offers 15 additional tips for Benson Hill, providing a more comprehensive view of the company's financial situation and market position.
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