Benson Hill to go public in $1.35B SPAC deal

Source: fooddive.com

Dive Brief:

  • Crop genomics platform developer Benson Hill is becoming a publicly traded company through a merger with special purpose acquisition company (SPAC) Star Peak Corp II, which is run by Illinois’ Star Peak, according to a press release. The deal, which is expected to close in third-quarter 2021, will yield $625 million in capital for Benson Hill and value the company at around $1.35 billion. Benson Hill CEO Matt Crisp will take the helm of the combined entity.

  • Through the merger, Benson Hill is hoping to better position itself to capitalize on the growing plant-based foods segment and investors’ appetite for adding ESG plays to their portfolios. Using AI, data and a variety of breeding techniques, Benson Hill is able to identify seed varieties that have appealing flavor profiles, protein content and other desirable attributes.

  • The popularity of plant-based protein continues to expand, creating a high demand among food manufacturers for ingredients that meet other metrics around sustainability, taste, and texture. SPACs have emerged as a way to get a company listed on the market quickly to take advantage of high demand around its offering.

Dive Insight:

St. Louis-based Benson Hill uses CRISPR gene editing and data analytics to identify new seed varieties at a much faster rate than traditional plant breeding and discovery methodologies. In March 2021, it launched two new business segments: Ingredients, which focuses on enhancing soybeans and yellow peas to develop promising varieties for plant-based food applications, while Fresh focuses on developing and commercializing differentiated produce and functional foods to serve the “food as medicine” space, which consumers are increasingly embracing.

The SPAC merger provides Benson Hill with a major injection of capital to fuel its expansion into the plant-based foods and functional ingredients segments, which are becoming increasingly more crowded as startups like CoverCress, Yield10 Bioscience and Elo Life Systems also work to bring products to market.

Biotechnology startups often require high levels of capital to invest in their technology, R&D and talent. The SPAC deal will allow Benson Hill to further develop its CropOS genomics discovery platform while also expanding its marketing and outreach team to find potential end-users in the plant-based and functional ingredients space. Benson Hill also operates a processing facility through its subsidiary Dakota Ingredients, which it may need to expand in the near future. It may also use the capital to expand its partnerships with growers who cultivate its unique seed varieties under specific growing conditions to align with the startup’s sustainability goals.

SPAC deals are emerging as a popular vehicle for agtech companies interested in going public. High-tech greenhouse startup AppHarvest merged with SPAC Novus Capital earlier this year raising $475 million at a valuation of over $1 billion, while vertical farming startup AeroFarms is merging with Spring Valley Acquisition, raising $357 million at a valuation of $1.2 billion. 

The agtech startups going public share common themes around producing food using fewer resources and with less environmental impact. They also capitalize on key consumer trends like plant-based eating, local and fresh produce and better-for-you ingredients. ESG investing, which stands for environmental, social and governance, is exploding among investors who are hoping to do more with their funds than simply turn a profit. 

Startups like Benson Hill offer investors a way to tackle both investment criteria at once. Meanwhile, by going public the startups benefit from a major injection of capital to ramp up production and boost marketing. Benson Hill has already attracted investment from major players like GV (formerly Google Ventures), Wheatsheaf, Bunge and Dreyfus Company. Having powerful partners in its investor stable adds strategic support and guidance, which are incredibly valuable for startups like Benson Hill that are aiming to revolutionize agriculture.

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