ArborGen Inc., the U.S. developer of genetically modified forest trees, plans to raise as much as $75 million in an initial public offering of common shares to pay for facility upgrades and research.
ArborGen, a joint venture of U.S. companies International Paper Co. and MeadWestvaco Corp. and New Zealand’s Rubicon Ltd., will use the proceeds to buy a new headquarters, manufacturing plants and research laboratories, and to repay debt, the Summerville, South Carolina-based company said today in a regulatory filing. The price and exact size of the offering haven’t been determined.
ArborGen, the world’s largest seller of conventional seedlings for forestry, is developing freeze-tolerant eucalyptus trees for the U.S. South. The company said in the filing it had sales of $21.6 million in the year ended March 31 and long-term debt of $12.8 million as of June 30.
ArborGen said it plans to produce modified trees for the paper industry in much the same way Monsanto Co. provides genetically modified crops to agriculture.
Goldman Sachs Group Inc. and Citigroup Inc. are acting as joint book runners for the offering, ArborGen said in the filing.