Exosect Says Licenses to Be Bait for Bayer-AgraQuest Type Deal

Exosect Ltd., a maker of electro- static powder for spreading biopesticide, is discussing tie-ups with 10 agrochemical companies including Syngenta AG (SYNN) in the hope a takeover proposal will follow, its chief executive officer said in an interview.

The biotechnology research company’s backers WHEB Ventures Ltd., Oxford Capital Partners Ltd., Entrepreneurs Fund Management LLP, MTI Partners and Hygea VCT (HYG) are looking to exit within two or three years, CEO Martin Brown said. Winchester, U.K.-based Exosect is looking to beat the almost $500 million price tag that Bayer AG (BAYN) paid for AgraQuest when it acquired the bio-pesticide maker in July.

“Our strategy is to license, on the basis that we feel like one of the licensees is going to be our exit partner,” the former executive of Syngenta.

Exosect, which licensed a bee-health product to Bayer AG in 2010, is seeking partners to commercialise its palm-tree based Entostat powder, which binds biological control agents to crop- killing insects by picking up their electro-static charge. The world’s largest makers of crop sprays are increasingly turning to startup research firms as their technologies become generic, said the 25-year industry veteran.

“Syngenta have got to do something about their R&D,” Brown said. “I would guess 70 percent of Syngenta’s technology is going to be generic soon.”

BASF SE (BAS)’s purchase of Becker Underwood for $1 billion, Bayer’s AgraQuest takeover, and Syngenta’s purchase of Devgen highlight a “feeding frenzy” by established companies over the last six months as they seek new technology, he said.

To contact the reporter on this story: Patrick Winters in Zurich at pwinters3@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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