This page contains IPO information based on the Prospectus dated 18 October 2019. Link for the Prospectus: https://events.miraqle.com/Terragen-IPO/Home/
(Disclaimer: The above key dates are for references only. They are subject to change by the company at any time. You shall not rely on this information for any investment decisions. For any changes, you shall refer to the company’s official website or the latest version of the Prospectus. While reasonable efforts are made to update the information, we make no warranty about the accuracy, completeness, reliability or timeliness of the information.)
The Offer contained in this Prospectus is an invitation to apply for 80,000,000 New Shares in the Company at $0.25 per New Share.
The Offer comprises:
No general public offer of Shares will be made under the Offer.
Bell Potter Securities Limited and Evans Dixon Corporate Advisory Pty Limited are acting as Joint Lead Managers and Underwriters to the Offer. The Offer is fully underwritten by the Joint Lead Managers, subject to the terms of the Underwriting Agreement.
Minimum application size is $2,000 of New Shares (being 8,000 New Shares), with incremental multiples $500 of New Shares (being 2,000 New Shares).
Terragen was incorporated in Australia in May 1996 and is the holding company of Terragen Biotech (incorporated in Australia in December 2009). From 1996 to 2009, Terragen was largely inactive.
Terragen essentially commenced operations at the time Terragen Biotech was incorporated. The goal of Terragen and Terragen Biotech (together the “Terragen Group”) was to develop technologies with environmental remediation potential. Several years later, the Terragen Group began its efforts to support dairy farmers seeking to reduce the increasing rate with which chemical fertilisers were being used.
Following its conversion to a public company in January 2014, Terragen initiated a strategy to commercially develop Great Land by partnering with a select number of farmers covering the dairy, macadamia, grape, banana, and horticultural cropping sectors. As part of this strategy, Terragen also engaged independent research organisations to undertake independent trials in order validate testing results and ultimately support the commercialisation of Great Land.
In 2016, Terragen expanded its product platform by engaging the University of Queensland’s Veterinary School to conduct animal health and nutrition trials. Terragen’s relationship with the University of Queensland’s Veterinary School continues today and involves a team of researchers led by Dr John Al-Alawneh.
In 2018, a dedicated research and production facility in Coolum, Queensland was opened to accelerate new development and vastly increase Terragen’s ability to bring products to market. This included undertaking trials of Lactolin and Mylo®, and commencing research and development work on Halo.
Within the ‘biological agriculture’ industry, the Terragen Group operates in the soil health and productivity and animal nutrition and health industries as illustrated in the diagram below.
With a commitment to a rigorous science-based approach to microbiome research and development over the past few years, Terragen has created natural, biological solutions to assist farmers address soil health and animal productivity, some of the problems facing the farming sector.
Terragen Products leverage the benefits certain microorganisms can provide. Terragen sources these microorganisms from different natural sources including certain soils, plants and animals.
Terragen screens these microorganisms first by creating a genomic profile of each microorganism, a profile that helps identify the function of each gene. Further gene function is subsequently elaborated by in vitro (in the laboratory) testing of the microorganisms against specific targets. Terragen then combines specific microorganisms that work in concert to optimise efficacy against targets. These concert products are subject to in vitro testing to identify the optimal microorganism combination product. The last step involves in vivo (in real-life settings) testing. Terragen’s technology is therefore a combination of methods of collecting, characterising, screening, and combining microorganisms to achieve optimal efficacy against specific target applications.
Terragen’s current core set of microorganisms is based in large part on a number of different microorganisms falling in the general lactobacillus group of microbes. Terragen’s current products are based on unique combinations of lactobacilli that are produced individually and blended under quality-controlled conditions. Terragen holds registered patents relating to microbial inoculants compositions comprising bacterial strains and antimicrobial activity of bacterial strains.
The following granted patents and pending patent applications (detailed in the Intellectual Property Report in Section 10) held by Terragen relate to microbial inoculants and fertilizer compositions comprising bacterial strains.
The following granted patents and pending patent applications relate to the antimicrobial activity of bacterial strains:
Terragen has created natural, biological solutions to assist farmers address soil health and animal productivity problems facing the farming sector. In particular, Terragen has commercialised the following two Terragen Products:
It also has two additional animal health Terragen Products classified as veterinary medicines under development:
The current production capacity at Terragen’s manufacturing, research and development facility located in the Coolum Eco-Industrial Park on Queensland’s Sunshine Coast is estimated to have been operating at approximately 4% of its total current equipment capacity.
In Australia, the Terragen Group generates revenues from the sale of Great Land and Mylo® through its retail agency distribution network.
In New Zealand, Terragen generates revenues from the sale of Great Land and Mylo® to farmers.
Terragen’s key cost drivers are microbe production, packaging, distribution, and sales and marketing.
Terragen historically sold Great Land directly to farmers. These were predominantly dairy farmers, banana growers, macadamia growers, avocado growers, vegetable growers, and vineyards.
In February 2019, Terragen rolled out a retail agency distribution strategy in Australia to incorporate sales of both Great Land and Mylo®, which allows Terragen to supply its products to farmers through select agricultural retailers.
The retail agency distribution strategy leverages the network of farmers and growers serviced by these retail agents. Since it launched its retail agency distribution strategy in February 2019, Terragen has signed 16 retail agents comprised of 68 separate retail outlets, including the following national and regional distributors:
Where the Agent acts as Terragen Biotech’s sales agent, the Agent is paid according to the commission structure set out in the product schedules attached to the Retail Agency Agreements (detailed in Section 9.2) provided to the Agent from time to time. The following commission structure is presently set out in Terragen’s current Product Schedule:
(i) Base – 20% (Guaranteed)
(ii) Payment on time – 5% (Performance)
(iii) Sales target – 4% (Performance)
(iv) Customer details – 1% (Performance)
Global revenue for the agricultural biological products market, combining plant and animal sectors, is estimated at US$16 billion in 2018 and projected to be US$32 billion in 202510, which is a compound average growth rate (CAGR) of 11% as biological rather than chemical solutions are increasingly being sought and adopted by farmers across the globe.
Biological products used for soil and plant health and productivity, combine to a global revenue estimated to be US$11 billion in 2018, and projected to reach approximately US$23 billion in 2025, a CAGR of 11%.
The animal health and nutrition sector is a well-established market where the use of biological products is on the rise.
It is estimated that 40,075,194 Shares (being 21.46% on the Listing Date) will be subject to escrow arrangements:
The commencement date of the 24 month period or the 12 month period is subject whether the Shares are subject to voluntary escrow or ASX mandatory escrow.
Managing Director and Chief Executive Officer
Justus holds an MBA from the University of Washington, graduate degrees from the University of Utrecht and Southern Illinois University, and is a Fulbright Scholar. Justus was appointed to the Board in June 2017 and assumed the role of CEO in July 2017. Justus’ thirty-year business career focused on commercialisation of new technologies in agriculture and human life sciences. Justus worked at Monsanto for nearly 15 years in roles of new technology development, strategic planning, corporate development, and general management. Justus has since held CEO roles with ASX listed Progen Pharmaceuticals Limited, Nestle Health Science’s Vital Foods and Chirogen Pharmaceutical Technologies.
Paul Schober has a PhD and MBA from the University of Sydney Paul has 30-year career in the animal health industr which includes holding senior executive positions in which he established global distribution agreements and implemented commercial rigour for biotechnology research companies including Peptech Animal Health, Anatara Lifesciences and Apex Laboratories.
Independent Non-Executive Director
Sam Brougham has an economics degree from the University of Adelaide Sam has over thirty years’ experience in private and public investment and is currently a director of Ellerston Global Investments and Ceres Capital, a private global equity investment firm he cofounded in 1999. Sam also co-founded Structured Asset Management in 1993. After receiving an economics degree from the University of Adelaide, he spent his early career with Price Waterhouse, and as a partner at JB Were.
Greg Robinson holds a BSc (Hons) and PhD in Physics, is a fellow of the Financial Services Institute of Company Directors and a Member of the Australian Institute of Company Directors. Greg is currently the Chairman and CEO of Exablaze, an Australian manufacturer of the world’s fastest computer networking equipment. Prior to this Greg worked in the Financial Services industry for more than 25 years. He has had exposure to Trading, Funds Management and Stockbroking. He served as Managing Director and CEO of Asia Pacific for ITG, a listed (NYSE:ITG) global quantitative stockbroker.
Proposed Director-Non-Executive Director
Dr. Ryals served as president and CEO at Metabolon from 2002 until 2018. Before founding Metabolon, he was CEO, president and founder of Paradigm Genetics, Inc., a publicly traded agriculture biotechnology company focused on industrializing the process of gene function discovery. Dr Ryals has 30 years of experience in the biotechnology industry, including senior research positions at Novartis and Ciba-Geigy. He currently serves on the Board of Directors of AgBiome, a provider of early-stage Research and Development for agriculture, and the advisory board of the College of Agriculture and Life Sciences at North Carolina State University.
Ingrid van Dijken
Proposed Director-Non-Executive Director
Ingrid holds a Masters’ degree in International Relations from the Graduate Institute in Geneva and an undergraduate degree from the Universiteit Utrecht, in the Netherlands. Ingrid has more than 20 years’ experience in private banking and funds management both in Australia and Switzerland. During these years she held senior management positions and acquired an in-depth understanding of wealth management for high net worth individuals. Prior to joining IIG in 2014, Ingrid managed the UHNW segment of NAB Private Wealth in Victoria for five years. Before moving to Australia in 2009, she worked for more than twelve years in Private Banking in Switzerland. This included eight years at Union Bancaire Privee in Geneva, a private bank headquartered in Geneva.
Chief Financial Officer and Company Secretary
Stephen Kelly is a highly experienced Director, Chief Financial Officer and Company Secretary. A qualified Australian Chartered Accountant, Mr Kelly has more than 30 years international experience in the areas of external and internal audit, risk management and compliance, treasury and corporate finance across a range of industry sectors including agribusiness, mining, infrastructure, property development and banking and finance. Mr Kelly is a Member of the Institute of Chartered Accountants in Australia. Mr Kelly is a Director of Chesser Resources Limited.
Dr Karen Jury
Head of Research & Development
Karen Jury holds a PhD in microbiology. Karen Jury is a molecular microbiologist who has over thirty years’ experience in microbiological research in sectors including agriculture, food production and pathogen control. Karen has specialist knowledge in a wide range of molecular and microbiological research and production techniques, as well as experience in managing communications with patent attorneys and government agencies. Karen’s career began in the prokaryotic genetics group of the Food Research Institute, Norwich, UK, investigating various cheese starter culture projects prior to emigrating to Australia in 1999.
Dr Paul Scott
Head of Soil Health Product Technology
Paul Scott holds a BSc (Honours) in microbiology, an MSc in biotechnology, and a PhD in molecular bacteriology. Paul enjoyed an academic teaching and research career spanning 25 years, holding teaching positions at Central Queensland University and research positions at INRA in France and the University of Queensland. Prior to joining Terragen in 2015, Paul was a Research Fellow in the ARC Centre of Excellence for Integrative Legume Research at the University of Queensland.
Mr Andrew Wollen
Head of Soil Health Product Technology
Andrew holds a degree in rural science from Armidale, New South Wales and an MBA from the Melbourne Business School. Andrew’s experience in agriculture and business spans more than 30 years and includes senior operating and management roles in food processing, dairy nutrition, international trading, distribution, agricultural investment and environmental services. His early life experience of growing up on a grazing farm is complemented by attaining a degree in rural science at Armidale, NSW, and an MBA, Melbourne Business School. The recent decade of Andrew’s career has been motivated by environmental considerations which led to joining Terragen in July 2015.
Mr Adam Davies
Head of Sales and Marketing
Adam has an extensive 28-year career in the Australian Seed Industry, Adam has held senior management positions in Sales Agronomy, Marketing and as National Sales Manager. He has focused on plant agronomy from establishment to end market usage in pasture, hay, grain, turf and animal production systems across Australia and New Zealand. Managing commercial releases of new plant genetics to create sales opportunities and increased on farm profitability for clients.
ASX Codes, Offer Opening and Closing Dates are proposed only and are subject to change without notice.
The IPO information on the website provided by 61 Financial only serves general information purposes, it does not constitute financial product advice. All IPO information is retrieved from the Company’s Prospectus. They are subject to change at any time without notice. Investors shall refer to the Prospectus for detailed information.